In the complex and dynamic landscape of the business world, corporate governance plays a critical role in the success and sustainability of organizations. Why does a company need to govern itself well, what challenges are at stake and how do good practices improve the performance of managers and the company?

Why is corporate governance so important?

Today's successful managers have understood that “knowing how to be” in the company often takes precedence over “know-how”. Agility, management through project management, the concern for transparency, the mobilization of teams in the broad sense, have changed the culture of the company and upset its value charter.

The establishment of a governance system, regardless of its form, can and must now be a reflection of this transformation.

Governance, which creates value, is, first and foremost, a mode of operation inspired by the head of the company and disseminated at all levels. Managers and all actors in governance must therefore feel strongly involved.

Emerging needs in the face of current challenges

It must no longer be a question of governance imposed solely by the dismemberment of company ownership, between those who own it, the shareholders, those who use it, the managers, and those who receive benefits from it, but a governance chosen and animated by its actors.

Of course, the need for governance was first of all imposed because of the growing complexity of transactions: distant markets, ever greater legal, fiscal, social, regulatory constraints, and increasingly sophisticated financing, which can cause managers to lose the overall vision; hence the need to rely on non-executives, equipped with the capacity for analysis and perspective.

This need has also developed in the face of increasingly complex situations: disagreement or break in communication between shareholders and managers, inheritance transfer, acquisition, transfer..., hence the need to seek advice on business strategy Who can intervene by bringing an objective and rational perspective

Finally, the increase in the level of risk in the company, and the various high-profile cases, have also greatly increased the need for vigilant governance.

Building a vision for the business

However, selected governance is not only a reflection of a need for information and control. It is a question for its actors to build together a vision for the company, to define its strategy and the methods of “contribution” of the various actors to the development and performance of the company.

The company's response to how to organize this contribution is not unique and its culture, history and especially its people will depend on the choice made of its operating mode and its social bodies: Supervisory and Management Board, Board of Directors, Strategic Committee...

Whatever the form chosen, the success of governance will depend on the ability of actors to establish a genuine partnership relationship at the service of the company.

The foundations of a successful partnership

This partnership relationship will be all the more likely to be built as the shareholders (Directors, members of the Supervisory Board, members of the Strategic Committee) and managers in the broadest sense (corporate officers, members of the Management Board, members of the Strategic Committee, Management Committee, etc.) will be strong, involved, responsive and transparent.

SME managers, don't be afraid to open your capital to third parties: they are there to help you grow. New entrants don't just go looking for information: challenge the manager!

This partnership will be all the more effective if its members have been able to create the conditions for a community of interest: managerial shareholding and package systems are often a good response to the need to navigate in the same direction.

As long as the system put in place does not only force you to surpass yourself when operations go well but also when they go badly.

The choice and number of people around the table are also decisive: no cronyism but a common vision!

Best practices for effective governance

Finally, the golden rule to respect for a good partnership and good governance: everyone has a well-defined role.

The corporate body, regardless of the form adopted, makes strategic decisions as defined in the articles of association or shareholder agreements, and managers manage operations. To take the wrong role is to take the risk of a confrontation and a break in dialogue.

Respect for the agenda, the early dissemination of information and meeting reports also complement the best practices that will ensure the fluidity of the dialogue.

To learn more about the levers of strategic performance in business, discover the additional resources here.

Being a Director, executive corporate officer or member of a Strategic Committee is a “job” in itself: you must adopt the right position that you can acquire and develop.

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