Best practices in corporate governance are more than just checking the boxes to satisfy the requirements. They are an established set of guidelines that assist companies in performing better and establish trust with shareholders and other stakeholders. They are a road map to ensure the success of a business. They can be utilized by large or small businesses, public or privately owned, and all kinds of companies.

Good governance starts with the people. Boards need to select the most qualified candidates, develop an effective recruitment process and ensure that their employees are committed to the task. They also need to make sure they are able to evaluate management practices effectively.

The next step is to create a system to minimize conflicts of interests. This includes establishing the code of conduct for directors of the board, the audit committee and the compensation committee, and having policies in place that promote transparency integrity, honesty and ethical practices.

In addition to this boards must also have a clearly defined leadership structure and an independent lead director. This is true whether the board has a separate or combined chair and CEO. A strong, independent director of the board can be essential to establishing a culture which fosters collaboration and cooperation.

Finally, the best governance practices require boards to communicate with shareholders and other stakeholders regularly and in a clear manner. It is crucial to provide their financial statements, and other data easily accessible. This also includes offering regular updates on the latest or evolving governance standards and encouraging a dialogue among the various stakeholders.

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