Corporate governance is a standard of rules that permits organizations or businesses to effectively and responsibly ensure they are serving the needs of shareholders, stakeholders, management team, customers and the business as a whole. It is a term that is constantly evolving due to the changing business landscape, but it is the central driving force that dictates the direction and the mission of a board of directors. Encompassed within the definition of corporate governance is that the board of directors is meeting the company’s short- and long-term goals to drive overall success for the business in a way that matches shareholder and investor expectations.
Corporate governance has a very long and storied past, that incorporates managerial accountability, board structure and shareholder rights. Its history can be traced all the way back to the 16th and 17th centuries, but the current conception that is used for today’s organizations became more commonplace in the 1970s. At this point it was a term used only in the United States, but now is a term used in the global markets to ensure that the board of directors is meeting expectations. The current positioning of corporate governance creates a balance of power that creates a system of accountability for the boardroom and ensures a means to fight corruption and ensure that businesses follow a code of ethical conduct.
The board of directors designed to take on all corporate governance issues for an organization. Representing the shareholders, board members are responsible for ensuring the proper systems are in place (i.e., governance policies, risk controls, executive compensation) for a company to operate efficiently, profitably and ethically. How is corporate governance evolving? With the growing challenges of modern governance, board’s need the right tools, insights and analytics to understand market changes and better understand what competitors are doing. As a result, it’s important to understand how boards of directors are rising to meet the challenges of modern governance.
The world around modern corporations is changing and markets are becoming more competitive.. Companies that fail to innovate fast enough are being left behind. Corporate governance structures must adapt. Government regulations and shareholder pushes have vastly changed what the corporate governance issue landscape looks like. We’ve seen changes in the boardroom as well. The role of a board member has become more strategic. The risks overseen at the board level have grown in number and complexity, which means the skill sets that today’s boards need are evolving as well.
The rate of change in today’s business and governance landscape requires an integrated set of tools that can keep pace. General counsels and corporate secretaries must find efficiencies to manage all the entities and responsibilities under their purview. Board members need a system that delivers visibility and data from across the organization. Management teams need a secure platform for sharing sensitive documents and communications with the board and one another. And all stakeholders need access to the same data their investors have.
Boards should be looking for a governance software provider that has an integrated system to fulfill all necessary governance functions: board management, entity management, governance risk monitoring, secure messaging and file storage, and more. Modern governance solutions bring together historically disparate tools into one secure product suite. Board materials, voting and resolutions, evaluations, collaboration tools, document sharing, committee intelligence, candidate search, entity management—all these tools and features work together to enable seamless management and reporting.