In recent years, the "Corporate Governance" agenda has become a priority in business environments, and this is not by chance. The practice, which involves a set of processes, conducts, and laws, is essential to help organizations implement ethical and responsible operations to protect the interests of investors, employees, and customers.
Moreover, this relatively recent topic is decisive for maintaining transparency and, consequently, contributing to the competitiveness and success of public or private institutions.

To keep you informed about what the corporate governance process is, its importance, and its benefits, we, from the CodeBlog team, have prepared a complete article.
Read on and check it out!

Corporate Governance: the process

According to the IBGC (Brazilian Institute of Corporate Governance), corporate governance is defined as a system that directs, monitors, and encourages companies and other organizations, with the aim of ensuring a good relationship among partners, the board of directors, executive officers, supervisory and control bodies, and other stakeholders.
Corporate governance integrates a set of practices adopted to strengthen the organization, align the interests of all actors, and adapt these interests to the rules imposed by oversight and regulatory bodies.
The process helps guide an institution along an ethical path to achieve the expected results. 
In most cases, companies start small, and initially, the founders themselves carry out administrative functions. As the business expands, the team begins to grow, and new employees emerge to perform specific roles. Furthermore, over time, new members may join the company, such as: partners, directors, shareholders, and managers. From this moment on, corporate governance becomes necessary to address issues involving the relationship between principals (company owners) and agents (individuals hired by the owners to manage the business and represent their interests.)

Rules, auditing, and autonomy restrictions: the pillars of corporate governance:

Rules

This pillar involves the implementation of standards to structure the organization, and limit undesirable behaviors and conduct of administrators.

Audits

Conducting regular audits is essential to ensure that previously defined rules are being followed, in addition to monitoring the actions of administrators.

Autonomy restrictions

Restrictions are nothing more than limitations on the scope of action of administrators to determine which types of actions and decision-making they have - or do not have - the autonomy and authorization to validate.

The principles of corporate governance

Corporate governance is based on four basic principles, which are:

TRANSPARENCY

It means that the company must disclose relevant and reliable information about its operations, finances, and strategies, allowing stakeholders (people or institutions with some type of interest in the company's management) to make informed decisions and have trust in the organization.

EQUITY

It indicates that all stakeholders, regardless of position or area of operation, must be treated fairly, without any kind of social, gender, age, or racial discrimination.

ACCOUNTABILITY

It signals that the company must be responsible for its actions, decisions, and economic-financial movements, accounting to stakeholders and assuming the consequences of its choices.

CORPORATE RESPONSIBILITY

Refers to the company's commitment to ethics and encompasses safeguarding the entire environment and systems in which the company is included. It involves matters of financial, environmental responsibility, relations with employees, or any other type of capital of the institution.

Corporate governance: the importance

Corporate governance ensures that the interests of a business's managers are aligned with the interests of the business owners. To do so, it stablishes secure processes and strategies, grounded in transparency, accountability, and fiscal responsibility.
After all, it is certain that any company needs people to run its processes. Therefore, it is essential to have monitoring to prevent or minimize negative impacts caused by failures or slips.
Check out some (of many) uses of corporate governance in the following topics:

Values the brand

Whether for the external public, employees, or stakeholders, an ethical company that displays good corporate values has a much better reputation than an organization that does not account for its actions, is always involved in conflicts, and does not prove itself trustworthy.

Prevents scandals

You have probably seen some news reports disclosing a major corporate corruption scandal. This is a clear example of a crisis in corporate governance, and it occurs when the interests of a few individuals (from the company itself) are placed above the interests of the organization.
To avoid this type of conflict, corporate governance relies on some codes that work to ensure the maintenance of good management practices and brand value.

Attracts investors

Stop and think: would you prefer to invest in a company whose operations are unrecognized, or invest your money in an organization that has a good reputation and presents no management issues?
Surely, your answer is the same as that of investors. Therefore, strengthening corporate governance is also a way to make a business stand out among others.

Increases market value

Taking into account previous topics such as brand valuation, prevention of corruption scandals, and attracting investors, it is certain that investing in corporate governance contributes to increasing a company's market value and competitiveness.

Compliance

Frequently, the term "corporate governance" appears linked to Compliance, which means "to be in conformity."
One of the main areas of corporate governance, Compliance consists of a set of guidelines, rules, and procedures aimed at ensuring that the company conforms to the laws and regulations applicable to its business sector and may take into consideration:

► ISO 9000

► The Anti-Corruption Law

► Labor, environmental, regulatory, and accounting standards, among others

► The company's code of conduct.

Discover CodeCell!

The CodeCell is the ideal solution to help your company implement the best corporate governance practices.

Created by the specialist team at CodeBit, the tool is a cloud-native development cell that creates hybrid development sub-cells to integrate an organization's internal and external developers.

Widely adopted by startups, the concept utilizes a multidisciplinary cell to enable the exchange of experience and fresh perspective with members who have participated in different projects.

To make the application of CodeCell viable, CodeBit uses its established training and qualification structure, enabling a controlled distribution of knowledge. Additionally, it offers quick answers to urgent or seasonal demands without the need to implement long and uncertain hiring, training, and qualification processes.

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

Furthermore, keep an eye on CodeBlog. We will have news here soon.

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