What does Corporate Governance mean for Your Family Business?
Though corporate governance is applicable to all businesses, the responsibility for creating and enforcing fundamental guiding principles depends on the size and type of company.
In a larger organization, corporate governance may be assigned to a large board of directors and/or senior management. Responsibility for governance in a family business, or in small, privately held companies may be shared by a select group of executives.
What is Corporate Governance?
Simply defined, corporate governance is the system of procedures or rules that guides the operation of a company. Principles of ethics and concepts of accountability, fairness and transparency make up this policy framework.
Through established best practices, management and shareholders fulfill necessary corporate objectives in a responsible manner.
Corporate Governance is a system of checks and balances guiding the operation of a company, for the good of all stakeholders. Basic goals of good governance in family business include effective procedures guided by principles of ethics, accountability and transparency.
Corporate Governance Styles - Which Suits Your Family Enterprise?
Concepts and principles of corporate governance are influenced by different theories and factors. In a family business, corporate governance styles should encompass two points of focus "business and family" and work towards finding consensus between any competing objectives. Regardless of varying parameters, good communication is essential for effective corporate governance.
The Alberta Business Family Institute understands the unique needs of family business. We advise family-run enterprises on a variety of issues, including corporate governance, providing essential tools, consulting services, education programs and resources such as books and workshops. Contact us today for more information.