Corporate governance relates to a set of specific policies, laws and institutions, and the processes and customs used to administer a company or business. Corporate governance also involves the stakeholder relationships with regard to the goals that govern the business. Principal stakeholders include shareholders, board of directors, and executive and operational level management. Other stakeholders may involve creditors, regulators, suppliers, employees, customers and the business industry or community.
Educate chief executive officers and all of those involved in the management operations of the company, including senior managers, to gain an understanding of the theory behind corporate governance. All necessary parties should learn about compliance issues and how they directly and indirectly affect the company. Learn about the external marketplace and legislation that can safeguard the company's policies and processes. Read books on the subject of corporate governance such as "Corporate Governance: A Practical Implementation Guide" by Alex Knell. Review the Sarbanes-Oxley Act, designed to restore public confidence in corporate governance, passed by the U.S. federal government in 2002.
Join the International Corporate Governance Network (ICGN) to develop, maintain and revise the company policy according to worldwide corporate governance standards. Participate in the ICGN's knowledge, expertise and networking resources with corporate governance institutional investment, business and policy professionals.
Review the company departments relating to specific corporate governance mandates. Develop a strategy including which types of specific compliance should be addressed immediately and which can wait. Outline an internal system that uses the policies and processes of the company to support shareholder and stakeholder needs. Review appropriate code sections for each level of compliance. Prioritize by using check lists and assigning tasks to appropriate parties.
Develop a measurable corporate governance strategy. Manage the business for the long term by investing in and engaging with companies that deliver sustainable returns. Be prepared to sacrifice short-term opportunities in favor of less risk and better long-term results. Design plans that consist of measurable results that can be monitored.
Create a leadership team of all parties involved. Hold meetings to determine how to use the developed strategy plan. Make sure team members know their roles and responsibilities in governing the company. Refer to the plan for guidance and to create new recommendations as needed. Use the plan as a working document and review it regularly so that it may be adjusted accordingly.
Ensure accountability of certain key individuals in the organization through methods that are designed to reduce or eliminate inefficiency. Use methods that involve procedures designed to add real value to the company. Specific procedures should add to the sale price of the business so that the buying pool would be increased prior to the future sale of the company. Understand that corporate governance standards are an ever-evolving set of business rules, the demands of which continue to expand and rise.