Corporate governance is a process by which a corporation is directed, managed and run. Organized properly, it serves as the foundation for business decisions, supporting enterprise growth, and stakeholder value.
Organizational documents are key to the legitimacy of a business and its growth. These are primarily corporate formation and operational documents which provide a clear dictation of business activities. Primary here are corporate formation and operational documents which provide a clear declaration of business activities.
The structure of a business depends on the type of entity a founder chooses to run and the jurisdiction they’re in. For example, a corporation is codified by way of a Certificate of Incorporation along with associated bylaws that outline operating procedures.
These documents form a corporation’s basic charter governing management, operations, and equity holders’ rights.
Today it’s not uncommon to see founders ignore proper corporate governance practices in their haste for a quick business launch and market presence. And as is often the case in a rapidly growing industry sector, this oversight can run afoul of stringent and rapidly evolving regulatory requirements and requests for transparency.
Moreover, early investors and stakeholders often overlook these governance shortfalls in their quest for a quick investment return.
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