Why is governance important in a business organization?

Governance is key to business performance. But what does it mean?

Enterprise governance is the set of processes, regulations, laws and institutions that provide the framework for corporate management, administration and control. Its goals are those assigned by governance itself. The system regulates relations between the numerous stakeholders involved.

Main stakeholders are the shareholders whose vote decides on members of the Executive and Supervisory Boards. Independent directors are also appointed. These Boards in turn appoint management teams and corporate officers (Managing Director, CEO …).
Other stakeholders are the workforce, the customers and suppliers, the banks or other lenders, the local or business support community, and third parties more generally, that is, all those coming into contact with the company.The TIDO governance concept attaches great importance to this very broad definition of stakeholder. Experience has taught us that in-fighting for supremacy by one set of stakeholders against others drains an enterprise of its value-creating potential. We seek the balance of powers that is critical to corporate health and long term survival.

TIDO looks at what we call the enterprise “power wave,” a company’s overall organizational dynamics. Sound governance encompasses not only senior management and directors, but operational teamwork. Our assessment techniques are based on interviews with key stakeholders. We focus on strategic issues and draft recommendations that often propose new governance by appointing independent directors.

We seek to realign the interests and values of the various stakeholders by introducing optimal governance structures.