Hiring a corporate governance consulting firm to help you address issues with how your business is organized can be a difference-maker. It's reasonable to wonder, though, why you need outsiders to help you with corporate governance services. Many companies seek such assistance for the following four reasons.
Independence and Avoiding Biases
One of the main arguments for working with a third-party services provider is to get an independent perspective. When looking at corporate governance as an insider, it's hard to separate yourself from the history of the business and the people who are there. A third party can come at governance problems with fresh eyes, and they can exercise independence. Especially if there are concerns about internal actors favoring particular choices or people, this independent viewpoint can cut through to what really needs to be done.
Studying Governance Trends
Even if you have a solid culture of corporate governance, there's a good chance you're spending most of your time putting it into action. This can make it hard to keep up with trends.
For example, a public company that hasn't reviewed its governance in a couple of decades might fall behind on shareholder advocacy initiatives. They would likely find it easier to work with someone who has implemented such initiatives than trying to wade into those waters without experience. A corporate governance consulting team can help you set a seat at the table for those parties.
Following Regulatory Changes
As much as corporate governance is about building a culture and establishing decision-making processes, there is often an element of regulatory compliance. It's important to know what the governance rules are for your type of organization.
Similarly, you'll want to keep an eye on industry-specific regulations. For example, your state might add rules imposing a fiduciary responsibility to your company's clients. This can significantly change who can make a decision, how they report their work, and what happens if something goes wrong.
It's also common for corporate governance to shift when the business changes. For example, an acquiring company might have to figure out how to integrate board members from a business it's buying. It's important to avoid redundancies while being inclusive. That's a tricky balancing act that can lead you to either overdo inclusiveness or end up excluding folks to the point they become upset.
Similar problems can occur when a company is restructuring its board. It's important to address concerns while making sure the corporation's goals remain the focus.
Reach out to a corporate governance service to learn more.