Corporate Governance Policies:Protecting Your Corporation From Liability
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 can help your business create a specifically tailored, effective corporate governance policy.
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. These are usually set out in 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.
How Kahane Law Office Helps Build Effective A Corporate Governance Policy
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.
- 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
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.