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Corporate Governance Policies: Protect Your Corporation Today!
A critical component of a successful business is corporate governance. Without an effective corporate governance policy, a business can find itself running afoul of regulatory and legal rules. This can have a direct impact on the financial success of the business. The business and corporate lawyers at Kahane Law Office in Calgary, Alberta help your business create a specifically tailored, effective corporate governance policy. We prepare these on a flat rate basis to ensure you maintain control over costs. Directors and officers of companies must know their obligations to properly effect governance.
What Is Corporate Governance?
Widely speaking, corporate governance captures the mechanisms, processes and relations by which corporations are controlled and directed. They define the inter-relation amongst the various actors that comprise a corporate body. Governance mechanisms include monitoring the actions, policies, practices, and decisions of corporations, their agents, and affected stakeholders. To properly set out these rules, a corporation generally drafts and implements a clear corporate governance policy.
A corporate governance policy also identifies the distribution of rights and responsibilities among different participants in the corporation. These include such people as the board of directors, managers, shareholders, creditors, auditors, regulators, and other stakeholders. The corporate governance policy will include the rules and procedures for making decisions, dealing with conflicts of interest and avoiding regulatory issues in corporate affairs.
How Corporate Governance Policies Help A Company
A key part of a corporate governance policy is the systems and processes by which a corporate board of directors is operated. In a small business, the board processes are often informal and lack a defined structure. Many closely held private companies use legal mechanisms such as a Unanimous Shareholder Agreement to define the actions and responsibilities of the board of directors (including the process of their election). This may not replace a corporate governance policy.
As a business grows, it may need new investors and capital to meet business goals and fund needed infrastructure. It may also add new actors such as employees, agents, creditors and stakeholders. As this happens, a corporate governance policy becomes increasingly important. The importance is highlighted by the existence of a coalition for good corporate governance.
What Size Business Needs These Policies
Often governance policies apply to business that include more than one person on its board of directors. Certainly every publicly traded company should have a policy in place. However, this also includes any business with multiple directors or decision makers. Key to the successful operation of a business, is ensuring that all decision makers understand the rules under which they operate. Further, each decision maker must follow the same set of rules and ethics. Lastly, even a smaller business that anticipates growth, is self protective by implementing a policy which covers governance early on.
How Kahane Law Office Helps Build Effective Policies
The corporate governance policy lawyers at Kahane Law Office we can help you in your corporate governance by:
- Assisting you to build a strong, qualified board of directors and evaluate performance;
- Define roles and responsibilities. Establish clear lines of accountability among the Board, Chair, CEO, Executive Officers and management, including written mandates for the Board and each committee setting out their duties and accountabilities;
- Develop written position descriptions for the Board Chair, Board committees, the CEO and executive officers;
- Draft a conflict of interest policy, a code of business conduct setting out the company’s requirements and process to report and deal with non-compliance, and a Whistle-blower policy; and lastly
- Assist you in your risk management. Companies should regularly identify and assess the risks they face, including financial, operational, reputational, environmental, industry-related, and legal risks.
Corporate Governance Policy Lawyers In Calgary, Alberta
You work hard to build your business. When the business grows to include more investors, director and / or shareholders, including proper policies is key. Proper policies protect the business to ensure the proper running and operating of it. When growing, operate in a forward looking manner by implementing a clear policy. Finally, Our team helps design a custom policy that meets your corporate needs and situation. The business and corporate lawyers at Kahane Law Office in Calgary can help with your corporate governance policy needs. We can be reached toll-free at 1-877-225-8817 (or 403-225-8810 locally in Calgary, Alberta), or email us directly here.