A clear corporate governance structure is a great way to ensure transparency and fairness as well as helping your business develop a an enduring relationship with shareholders and other members of the community. It helps define roles, ensures accountability, and allows for compliance with the law and regulations. It also helps a company’s growth strategy over the long term by aligning the interests of shareholders with the interests of the board as well as management.

There are a variety of corporate governance, but the one that’s most effective for you depends on your company’s objectives and culture. A few of the key concepts to be aware of are:

Unitary Board Structure

In this system of corporate governance the board of directors is responsible for making decisions and oversight of corporate activities. The board is comprised of both executive and nonexecutive directors. This type of structure is typical in small to mid-sized businesses.

Continental Model

A two-tiered structure, the Continental model gives control to a management board as well as a supervisory board. The management board is made up of the company’s insiders like managers and executives. The supervisory board consists of outsiders, such as bankers and union representatives with stakes in a company.

Stakeholder-Oriented Governance

This type of governance structure is different from traditional structures that focus on shareholder interests, will consider all stakeholders, including employees, customers and vendors in addition to the community. It encourages boards of directors to adopt policies that reflect environmental and social concerns what are the four types of corporate governance and to create engaging programs that are meaningful. The board should be transparent about its decision-making process and communicate this information to all stakeholders. It must also ensure that there are clear lines of communication between the management, board members and shareholders.