You have probably already heard about Corporate Governance, but because it is a relatively new term, many people still do not know for sure what it is about and what the specifications of the concept are.
With this in mind, we have prepared an informative article to keep you in the loop on everything this set of processes, customs, and laws involves and, in this way, present an ideal solution to transform the future of your organization.

Keep reading and check it out!

After all, what is Corporate Governance?

According to the IBGC - Brazilian Institute of Corporate Governance, this concept defines: “the system by which companies and other organizations are directed, monitored, and incentivized, involving the relationships between partners, the board of directors, management, supervisory and control bodies, and other stakeholders.”
In other words, Corporate Governance integrates a set of practices adopted by an organization to align the interests of directors, shareholders, and stakeholders and reconcile them with the principles established by supervisory and regulatory bodies.

In practice, Corporate Governance helps map the paths that a company must follow to achieve the desired results.
This is because, generally, when a business is born, the main administrative tasks are concentrated on its founder. As the company begins to grow, other people and roles are introduced, such as partners, directors, managers, and shareholders. From that moment on, corporate governance becomes essential.

What are the benefits of Corporate Governance

Corporate Governance ensures that the interests of managers are in line with the primary interests of the business. Furthermore, it ensures that strategies and processes are followed correctly, strengthening the company's culture of accountability.
After all, considering that an organization needs, above all, people to drive the processes, it is essential that there is effective monitoring to mitigate negative impacts in case of failures.
Check out below some benefits promoted by the adoption of Corporate Governance.

Avoid scandals and conflicts

News about businesses involved in corruption scandals have become increasingly common and, most of the time, they are related to crises in corporate governance.
Precisely to avoid this type of problem, the first Corporate Governance codes emerged to ensure compliance with good practices and the maintenance of brand value.

Helps with the organization's good image

Good corporate governance promotes ethics and good values and helps an organization project itself as honest, correct, and transparent to stakeholders.
On the other hand, a company that does not put the concept into practice and lacks transparency in accountability, in addition to getting involved in conflicts, does not appear trustworthy and ends up damaging its reputation, with both internal and external audiences.

Attracts investors

The rule is clear. Companies with a bad reputation DO NOT ATTRACT investors.
Conversely, aligned organizations that follow good principles, besides avoiding problems, end up catching attention and expanding the margin for good investments.

Increases the organization's market value

This factor is a consequence of the others mentioned above. After all, by avoiding scandals, showing reliability, retaining talent, and attracting investors, it is possible to considerably increase a brand's value.

How does Corporate Governance work?

Within Corporate Governance, the relationship between owners and managers is regulated based on three pillars: rules, audits, and autonomy restrictions. Learn more about each of them below:

Rules

Establishment of rules in order to structure the organization and limit undesirable behaviors from managers.

Audits

They are carried out frequently to ensure that the defined standards are being met and to monitor the actions of managers.

Autonomy restrictions

Some restrictions are imposed to limit the action of managers and stipulate which actions and behaviors they are authorized to take.

The 4 pillars of Corporate Governance

Corporate Governance is based on four fundamental pillars. Find out what they are in the following sections:

Transparency

In practice, Corporate Governance determines that all data and information must be continuously made available to stakeholders, preferably in a practical and accessible manner. This involves financial documents, process progress, and decision-making. Thus, it makes it easier to ensure that a company acts with ethics and integrity before all stakeholders.

Fairness

Regardless of the position, role, or level of participation, it is fundamental that all stakeholders are treated in a fair and equal manner.

Accountability

Any and all financial transactions must be properly presented in the company's financial reporting, and must be clear and understandable.

Corporate responsibility

It is up to the organization to care for the entire environment and systems in which it is included. This involves environmental, financial, and social responsibilities.

4 steps to start investing in Corporate Governance

1. Establish roles and responsibilities

The first step is to define who the stakeholders are, and then stipulate who each one reports to and which tasks each one is responsible for.

2. Create a Board of Directors

To do this, elect people responsible for supervising organizational interests, the company's relationship with stakeholders, and for making important strategic decisions.

3. Implement a risk management policy

It is important to frequently assess what risks an organization is exposed to, whether they are operational, legal, environmental, or financial. With constant analysis, it is possible to create action plans in advance to mitigate failures or even avoid them.

4. Monitor

There are several monitoring actions that help ensure that all processes are being developed as planned, such as meetings, integration platforms, creating codes of conduct, and much more. Define the most suitable one for your organization and do not fail to monitor the steps and check if they really are on track.

CodeCell can help your business implement the best Corporate Governance practices!

We at CodeBit know that practicing Corporate Governance is essential to guarantee a higher level of technical governance. Therefore, we developed CodeCell - Cloud-native development cell, which consists of creating hybrid development cells, in which both the organization's internal developers and CodeBit's external developers participate.

Highly adopted by startups, the concept uses a multidisciplinary cell to enable the exchange of experiences and fresh perspectives with members who have participated in different projects.

For this, we use our already consolidated training and capacity building structure, in addition to the controlled distribution of knowledge and the possibility of rapid responses to urgent or seasonal needs, without the need for long and uncertain hiring, training, and capacity-building processes.

Want to know more about CodeCell? Click here and get in touch with our team of specialists.

Furthermore, keep an eye on CodeBit's blog. Soon, we will have news here!

A big hug, and see you in the next post!