Whether you run a startup or a long-time business, you are juggling an abundance of tasks on virtually any given day. However, the business and legal nuances – while extremely important – can pull your schedule down and force you to handle tedious tasks and fires.
Corporate governance that is well planned and carried out can help prevent this. It is a set of rules, practices, and processes regarding how your organization is ran or controlled. It can make “who does what,” risk management, and laying the groundwork for better efficiency and profitability sizably easier. At Hoegen & Associates, P.C., in Wilkes-Barre, PA, we help break the term down further and explain the benefits that corporate governance can have for a business.
From helping set up corporate governance to offering trusted counsel when complex scenarios arise, an experienced lawyer can help you. Hoegen & Associates brings a wealth of knowledge in this area and offers a steady hand.
Corporate Governance Explained Further
Corporate governance plays a number of key roles. Good governance helps a firm balance company management, shareholders for larger companies, financiers, suppliers you turn to or are considering, the government, and society. From company performance and quality assurance to action plans: corporate governance offers an important framework.
Benefits of Corporate Governance
Minimizes Agency Conflicts
A company might run into situations where the board of directors may not act in the shareholders’ best interests. Good corporate governance can prevent or fix that by helping the board align with the shareholders. Additionally, it can protect both internal and external stakeholders by laying out the relationship between them and the company and management.
Greater Investor Confidence
Well-executed corporate governance can help hold the company accountable and drive better results and relationships with investors. An excellent example is a business effectively tracking performance, compiling and disclosing financial and non-financial reports, and building deeper trust with the people and entities backing it. Without a solid foundation for such work, a company runs the risk of struggling to build a good relationship with the investor and creating concern.
Mitigates Risks
As business owners know: risks are practically everywhere. Some that go bad can feel like a pebble lodged in your shoe. Others can equate to a speeding freight truck. Effective corporate governance allows companies to identify the risks out there (from environmental to, especially in recent years, cyber) and how best to handle them. It helps ensure that true action is taken and that the right people know what is happening.
Compliance
In this article, compliance means that a business complies with the internal rules and regulations, such as the company, the articles of association, the codes of governance and ethics, and more, and external laws spanning government and international. If you’re the owner of a company that has grown to 100 people, good corporate governance helps ensure that your newer teammates know the rules on how to conduct themselves and do business. Also, if you are the CEO of a major corporation that does business across multiple states and countries, your company needs to make sure it does not break any laws (including ones prone to be missed by accident).
If you need help with compliance and ensuring your business navigates through legal complexities, turn to Hoegen & Associates. Located in Wilkes-Barre, PA, we offer you valuable experience and insight at both the Pennsylvania and national levels.
Promotes Corporate Responsibility
Good governance can promote corporate responsibility, notably regarding the environment and society. Among many examples: a company can better follow environmental and related laws, promote better health, and still offer a product or service of great value to the customer. Additionally, an organized and efficient business can be better equipped to launch awareness and public-relations campaigns, from volunteering to charity.
Concluding Ideas & Lawyers’ Central Roles
This article lists some of the many benefits of well-planned corporate governance. Also, a business manager can tackle a decent amount of the planning and putting this important framework together for the company. However, a lawyer’s assistance is extremely helpful. They can handle the legal side of corporate governance – from compliance to risk – at both the planning stage and when the many potential fires appear in months and years ahead.
If you are a business owner in Pennsylvania who needs assistance in governance, choose Hoegen & Associates. We offer valuable experience on the subject at the state, national and international levels. Reach out today.