Corporate Governance
Corporate governance is a trust-building mechanism that establishes a solid foundation for long-term value and fosters trust with stakeholders. Good corporate governance won’t just keep your companies out of trouble. Well-governed companies often draw huge investment premiums, get access to cheaper debt, and outperform their peers.
Investors Will Pay for Good Governance. Investors value corporate governance highly.
Good governance leads to lower debt costs as well quicker approvals. Banks and rating agencies see companies in a better light. Leveraging your corporate governance for fundraising means using it as a competitive advantage and a value proposition for potential investors.
Board of Directors and Independent Directors
Moment That Matters
Executive Coaching and Guidance
Objective
Aim to effectively assess your organization’s policies, internal controls, and authorization matrix by providing guidance and support to ensure transparency and risk mitigation, which are the core basis of corporate governance.
How Do We Help?
One effective corporate governance indicator is how well your organization operates on a daily basis and performs in your absence. That is driven by values, guided by policies, directed by internal control, and accountable for roles and responsibilities.
- Internal Governance Review:- This review assesses policies, procedures, and practices to help companies improve their corporate governance framework and enhance board effectiveness.
- Board Effectiveness Review:- This evaluation is designed to improve decision-making processes, strengthen board composition, and assess board performance to ensure it delivers value to the organization.
- Corporate Governance Implementation:- We guide organizations in implementing effective corporate governance frameworks through action plans, specific policies, and procedures.
- Director Education and Development, Presentations:- Our training programs aim to enhance directors’ understanding of governance practices and evolving expectations for the board’s role.
- Risk Governance and Compliance:- We guide organizations in developing risk management frameworks and compliance programs that integrate with governance practices.
- We wish to provide mentoring for key personnel:- We hope what we deliver to clients will be sustainable in the medium to long term. Many times, mentoring key personnel helps keep that momentum. We identify them as super users. Super users are responsible for mastering specific skill sets and internally training others. This is the benchmark method where the company can internalize the competence building without frequently hiring an external advisor.
What are the Benefits of Corporate Governance?
- Unlock Performance and elevate efficiency. Strong oversight and accountability can significantly improve your company's performance and decision-making. Access to relevant data mitigates legal and regulatory risks by adhering to established guidelines, leading to more efficient operations and better outcomes.
- Improving access to capital markets requires transparency, accessibility, efficiency, timeliness, completeness, and accuracy of information. Meeting listing requirements and including corporate governance in the investment decision process are critical.
- Access to Capital. Good governance can help your company secure financing by increasing transparency and accountability to investors and credit institutions. It puts investors in a better position to understand how your company operates, reduces risks associated with misuse of power, and is prioritized by investors today.
- It is increasingly clear that private equity investors carefully analyze investee companies' corporate governance before finalizing any deal.
- Investor Confidence. Good governance practices can increase investors’ confidence in a company. This correlation between good governance and access to capital is of critical interest to companies, as they often face difficulties raising funds from banks or capital markets. Many investors are willing to pay a premium for well-governed companies.
- Good Governance Makes Debt Cheaper. Better corporate governance standards help banks and rating agencies see companies in a better light, which means lower borrowing costs for well-governed firms.
- Credit Rating. Furthermore, banks recognize the importance of corporate governance in their credit analyses. Credit agencies such as CRISIL, ICRA, etc. (Moody’s and S&P) also consider corporate governance when rating a company; corporate governance factors such as board and management effectiveness, transparency of financial information, and related-party transactions are included in their rating criteria.
- Bank, Lenders Risk Assessment. Good corporate governance is not just a theoretical concept but a practical tool for reducing the risk of providing capital to a company. Banks and investors alike consider it critical. They often cite the need for company transparency and robust infrastructure as the main obstacles to investment.
- Performance Improvement. Corporate governance best practices aim to improve performance by conducting business activities and strategic planning effectively while managing risks correctly. ABN AMRO's study showed that companies with the best corporate governance achieved higher EVA measures. US-based companies with better governance had faster sales growth and higher profitability. Similarly, Brazilian firms with above-average governance had higher ROEs and net margins.
Why Corporate Governance?
Is Corporate Governance Costly?
- Corporate governance reforms may seem like an initial investment of time and resources; however, they are crucial for securing your company's future. Board members' presence will likely enhance your company's credibility in the market and facilitate bank credit approval.
- Proper risk management may involve some costs, but it is necessary to prevent losses caused by undesirable events and circumstances.
- Managing cash flow volatility is vital to ensure your company can cover its debt on time.
Why Choose Us?
Internal Control Expert
Corporate Governance Credentials
Finance and Risk Management
Guidance over Control
Coaching and Competence Focus
Guide and assist the CEO. We help the CEO focus beyond day-to-day operations by discussing risk mitigation and accountability by incentivizing them to navigate the organization through policy, internal controls, roles, and responsibilities.
One effective corporate governance indicator is how well your organization operates on a daily basis and performs in your absence. That is driven by values, guided by policies, directed by internal control, and accountable for roles and responsibilities.
- We wish to provide mentoring for key personnel. We hope what we deliver to clients will be sustainable in the medium to long term. Many times, mentoring key personnel helps keep that momentum. We identify them as super users. Super users are responsible for mastering specific skill sets and internally training others. This is the benchmark method where the company can internalize the competence building without frequently hiring an external advisor.
Frequently Asked Questions
Corporate governance is a crucial trust-building mechanism for long-term value and stakeholder trust. It involves collaborative efforts with robust practices focused on growth and value creation. While implementing corporate governance may seem like an initial investment of time and resources, it is crucial for securing your company’s future. Having board members present will likely enhance your company’s credibility in the market and facilitate bank credit approval.
No, it facilitates decision-making and ensures the well-being of all stakeholders. Good corporate governance goes beyond avoiding problems; it’s about unleashing your company’s potential. Companies with good governance often attract significant investment, access less expensive debt, and outperform their competitors.
Understanding and implementing good governance empowers small business owners by increasing transparency, accountability, and financing capabilities. It also contributes to risk management, expertise in business operations, decision-making, and guiding the company toward its goals, giving confidence and control. Good governance can also enhance the company’s reputation and attract potential investors and partners.
ESG refers to the environment, sustainability, and governance. Corporate governance represents the G part of the ESG. Governance is a fundamental framework that was established much before ESG adoption.
Independent directors play a crucial role in corporate governance by maintaining independence and strengthening their ability to make impartial decisions. They can provide constructive challenges to the ownership group, bring objectivity and accountability to the board, address sensitive issues, and suggest governance practices that attract talented directors and enhance overall company performance.
Independent directors play a pivotal role in a company’s success. Their diverse perspectives, valuable feedback, and expanded networks can significantly benefit the business. Most importantly, they strengthen the process of making impartial decisions, ensuring the company’s best interests are served.
An independent director’s role is multifaceted. They advise the CEO, ensure accountability and objectivity, plan succession and exit strategies, and oversee board committees to serve the company’s best interests impartially and objectively. They also play a crucial role in risk management and can provide valuable insights into potential opportunities and threats.
An independent director, also known as a non-executive director or an outside director, is a member of the board of directors who provides a unique and unbiased perspective. Executive directors are involved in the company’s daily operations.
For listed companies, independent directors can be selected from a databank maintained by a government-authorized body and then approved by shareholders in general meetings. Meanwhile, for unlisted companies, the company board, led by the CEO, is responsible for appointing the independent director.
