It is possible to accelerate your company's growth with strong Governance, and IVENS can help you!

Now that I have captured your attention, let's demystify the concept of Corporate Governance once and for all, why it should be a priority for any company that wants to be sustainable in today's market, its foundations, benefits and how IVENS can help you in practice, to define and implement the best practices for good Governance.

Nowadays, it is no longer enough for a company to have a strong market position, attractive products, competitive prices and a clear value proposition.

In addition to this foundation and strong financial performance, we need a robust organizational and governance structure, qualified management, well-implemented decision-making and risk control processes - essential requirements for the sustainability and longevity of any business.

What is Corporate Governance and what does it deal with?

With roots in the United States and the United Kingdom, this concept has become global and, despite having been rooted in our society for several years, its scope is still somewhat misunderstood.

Corporate Governance is nothing more than a set of rules, policies and procedures that frame and guide an organization, shareholders, board of directors, managers and fiscal council with the purpose of increasing the value of society, facilitating access to capital.

In practice, these are practices that aim to improve processes in companies, greater integration between hierarchical branches, and increased transparency in reporting to shareholders.

The aim is to identify techniques that ensure that decisions are being made effectively and, at the end of the day, help teams achieve strategic competitiveness.

Should it be a priority in all companies?

If we consider that any entity needs to receive guidelines and be governed, it becomes clear that any company, regardless of its size and corporate type, implicitly adopts governance practices.

Understanding what the pillars are and how to adopt best practices should be a concern for all business owners and managers and, in a broader sense, for all professionals.

Anticipating processes, predicting alternatives and having the strength to face and manage economic and operational unforeseen events requires an organic governance structure that preserves the company's identity and is properly prepared.

Good corporate governance practices are key to remaining competitive in a volatile market, driving growth and attracting potential investors.

Implementing good corporate governance practices is in the interest of all parties, with everyone benefiting from this transformation movement: it optimizes the company's performance and favors the interests of stakeholders such as partners, investors, customers, employees, creditors and society in general.

There are no ideal or perfect models of governance practices that we can replicate in all companies, because each one has its own particularities.

Even so, some pillars of action that we will look at below are essential for the development of a robust governance strategy.

What are the pillars of Corporate Governance?

These are the four pillars of governance practices, with the fifth pillar being Family Governance, designed to respond to the particular challenges of family succession and leadership:

• Governing bodies and decision-making processes;
• Risk management and internal control;
• Transparency and reporting;
• Corporate culture and commitment to Governance.

As sustainability is one of the biggest challenges and dilemmas that companies face, a good governance structure is crucial for them to be able to grow with solid business models.

Let's look at some practical examples of when this structure is not present and the consequences this has on the business reality!

Practical examples of the absence of governance policies in companies:

-> Example company 1)

When companies reach a level of revenue with a good profit margin, some may stagnate or slow down. Why?

In some cases of small companies, the CEO has all the decisions concentrated in him/herself and controls the various business areas.

If the company makes an exponential financial leap, this founder will no longer be able to manage all dimensions of the business and will need to quickly create management bodies that are up to the challenges and business needs, delegate tasks and define reporting and communication processes with teams and other governance practices.

-> Example company 2)

The identity and positioning of some family businesses tends to fade or even disappear from the market due to the poor preparation of the succession process, since the decisions, strategy and knowledge of the business were not properly or previously passed on.

To overcome these risks and ensure the survival of the family legacy, it is crucial to apply governance policies : to outline the company's succession plan and define a policy that promotes good coordination between the family and the company.

What is the real impact and benefits of Governance?

The benefits of Governance practices are evident:

• More efficient teams to generate profits and pay off debts;
• Companies more resilient in the face of unforeseen events and operational failures;
• Better management of succession processes;
• Reduction of dependence on key people;
• Lower risk of fraud, mismanagement and more transparency;
• More investors given the better financial performance;
• Greater operational growth and longevity in the market.

How can IVENS help you?

Now that you know the true impact and benefits of good Governance , do you feel prepared to take the next step and ensure the sustainability of your business?

IVENS is a consultancy specializing in developing strategic leadership capabilities in complex organizations, supporting corporate boards and executives to improve decision-making processes, leadership, ensure regulatory compliance and implement effective governance and risk management practices.

Get in touch with our team so we can help you chart this path!