Time to get the house in order: the fundamentals of Corporate Governance

At some point, every company or institution faces growing challenges that demand more structure, transparency, and professionalism in decision-making. In this context, establishing a culture of governance and implementing structured processes is not just a best practice – it is essential to ensure healthy, sustainable, and competitive development.

What is Corporate Governance?

Corporate governance is the set of principles, rules, processes, and structures that guide and control a company, ensuring it operates with ethics, integrity, transparency, fairness, corporate responsibility, and sustainability. These pillars strengthen business credibility, improve management, and support long-term viability.

Why implement Corporate Governance?

Well-established governance reduces internal conflicts, enhances risk management, increases operational efficiency, and strengthens the organization’s reputation in the market. It also facilitates access to investment, reinforces organizational culture, and promotes more structured growth.

Governance agents and structures

The main agents of corporate governance include shareholders, executives, board members, and other stakeholders who contribute to the direction and oversight of the business. The governance structure may include the shareholders’ meeting, board of directors, advisory board, supporting committees, and independent audits. It’s important to note that not all organizations require a full governance structure. Depending on their maturity level, size, nature of operations, or regulatory context – as well as the investments needed for implementation -companies should seek to adopt governance principles by creating a structure that fits their reality.

How do Boards work?

Boards of Directors and Advisory Boards play key roles in corporate governance. The Board of Directors has deliberative and fiduciary duties, guiding strategy and supervising management. The Advisory Board operates more flexibly, providing strategic counsel and bringing external perspectives to the business.

The advantages of an Advisory Board

For many companies—especially family-owned and mid-sized businesses—an Advisory Board is an excellent way to gain qualified external insight, mitigate risks, and accelerate growth. It provides a structured space for strategic discussions, helps professionalize management, and prepares the company for future challenges.

Conclusion

Adopting effective corporate governance is not only a competitive edge but a need for organizations aiming to grow in a structured and sustainable manner. Implementing an Advisory Board can be a crucial first step toward bringing new perspectives, strengthening management, and securing a more solid future for the business.
If your company hasn’t gotten its house in order yet, this may be the perfect time to start!