Corporate governance isn’t just for legally constituted corporations. They’re a framework within which leaders are required to do more than execute effectively on well-developed strategic plans. They must also be fair and accountable to all stakeholders. Regardless of whether your business has one or many stakeholders–shareholders, employees, clients, students or the community–your company’s approach to governance will change over time and depend on your unique needs and context. There are a few general principles you can apply to any size organization:

One of the most important aspects of good corporate governance is transparency. Transparency is crucial for board members and management to be open with shareholders, auditors and the general public regarding financial reporting, accounting, key decisions and internal practices. It is also important that your business discloses information about its social and environmental impact in ways that can be easily accessible to those who may be interested.

Another aspect of corporate governance is setting clear roles and the responsibilities of your board. This can be done by drafting job descriptions for the board including its chairperson and vice-chairperson committees, their chairs, or by creating terms of reference for directors in their individual roles. This ensures a uniform set of responsibilities as also clear guidelines for delegation and limitations on the power of. It can aid in creating a culture of collaboration and open communication while helping to reduce mistakes and ensure compliance with laws. It can also provide greater opportunities for growth as your business expands and diversifies.

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