Governance is everything that accompanies the work a business does. This includes all checks and balances, as well as the systems in place to make sure your business meets its objectives and avoids trouble. It also covers tasks that are focused on the bigger picture like planning long-term strategies or managing risks. You’ve likely been performing governance tasks since the beginning of your company, whether or not you are aware of it. As your business grows the requirements for governance will also increase. Governance can be any structure from a sole-proprietorship, to a board of directors. Take the time to carefully plan your governance arrangements and evaluate the impact of different options on your growth plans.

As a business grows and becomes more complex in its governance, it becomes more difficult and requires greater attention and resources. If your business is a publicly-traded entity with thousands shareholders with multiple share classes, and various lenders, then you will require robust procedures to engage shareholders. Additionally, you will require directors with the required abilities and knowledge.

Adopting good governance practices allows the company to operate in its best interests and improves its performance, resulting in more stability, efficiency and trust. It also makes a company more attractive to investors with high-end expectations and reduces the cost of capital. It improves transparency and allows quick response to any crises or controversy.