Corporate governance procedures must be updated as the world evolves. The days of companies absconding with shareholder concerns are over. With shareholder activism growing companies must be proactive to identify and address investor discontent before it becomes a problem during proxy season.
This means that a robust risk management process, internal control framework, and a disaster recovery plans are important to the success of a company. It is also crucial for businesses to recognize and accept the fact that managing risk isn’t an event that happens once, but it is a continual process.
Companies that are committed to establishing effective governance structures are more likely to succeed in the long run. Corporate governance isn’t just about making sure you’ve met a bare legal minimum; it’s about setting the stage for sustainable growth of business and prosperity.
It is essential that board members are aware of the dangers and difficulties that businesses can be faced with. This begins with an understanding of best practice guidelines that are continually updated to ensure compliance reflect the strategy and culture of the business, and simplify processes.
It is also important that boards spend the time required to comprehend and implement technology that offers best practices, including generative AI. This requires both time and money, but is the only way for boards to be able to evaluate the effectiveness of an organization in managing its risks.