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January 12, 2015

Corporate Governance – be as transparent as possible

AGM information, committees, external auditors, lobbying policies, articles of associations…the list seems endless. Add country and industry specific laws, rules …

AGM information, committees, external auditors, lobbying policies, articles of associations…the list seems endless. Add country and industry specific laws, rules and recommendations together with the different stakeholders’ expectations and you might have a tough time presenting it all clearly and transparently.

We can see in the ranking results that companies within FT Europe 500 score poorly in the Corporate Governance section, which might imply the difficulty of transparency. There are many things to consider within the field of corporate governance. Fortunately there are ways to bring structure to it.

A good place to start is by covering these three general areas: (1) authorities and regulations, (2) work processes, and (3) responsibilities and remuneration. Start off with the most requested content among your stakeholders.

Demand for transparency increases

Our research shows that investors are the corporate stakeholders most interested in corporate governance. They generally have good knowledge on how to govern companies and expect to be thoroughly informed about how companies that they invest in are managed.

But we live in transparent times and our research tells us that other stakeholders such as journalists and job seekers also want increasingly more information about the companies they’re interested in and specifically the people behind them.

When in doubt – always consult an expert

However, be aware that there are times when full transparency might not be the best option – for example with regards to financial information and business strategies. Also, board members generally do not talk about the companies they’re representing and instead let the chairman of the board take the role of being the united voice.

Comply or explain

Given the fact that all governance information about your company is not supposed to be official, it is important to consider the term “comply or explain”. This means that you as a company either comply with the rules and publish specific information, or explain why you don’t do it.

“Key audiences want to get underneath the skin of management.
Yet the vast majority of European corporate websites offer just a dull, 
short two cats and lives in Surrey’ biography.”

Phil Marchant, Managing Director, Comprend London

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Further reading

January 19, 2015

Lafarge receives top position in French Webranking results

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