Corporate governance practices must change as the world changes. There is no longer a time when it was acceptable for corporations to not pay attention to shareholder concerns. Companies must recognize and address concerns of investors prior to them becoming an issue during the proxy season.
This means that a strong risk management process, internal control framework and disaster recovery plans are essential to the success of a business. It is also essential for businesses to recognize and accept the fact that managing risk isn’t a one-time affair, but it is a continual process.
Companies that put a priority on establishing a solid governance system are more likely to flourish over the long run. Corporate governance isn’t only about completing forms or meeting the legal minimum. It’s about laying the foundation for sustainable business growth.
It is crucial that board members are aware of risks and challenges that businesses might confront. This begins with a solid understanding of best practices policies that are continually updated to ensure compliance and reflect the culture and strategies of the organization.
It’s also vital that boards invest the time to understand and implement best practices in technology, such as generative AI. This takes time and resources but is the only way for directors of boards to gauge how well their organization is managing its risk.
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