Corporate Governance is very crucial in running a successful company. It helps you to build sustainability for your company. An effective Corporate Governance structure must be put in place from the very day that your company is established and the governance rules must be reviewed before you establish your company.

The benefits of implementing an effective corporate governance structure include;

1. Mitigates Risk:  Corporate Governance helps you to leverage value for your company, there by helping you to grow your business consistently and with less risk.

2. Management Control & Improved Decision Making: When structures are put in place, decision making becomes smoother and unambiguous. There is transparency as the  rules and guidelines governing the company are carried out effectively and decisions are easily communicated. Also, corporate governance ensures that the management is accountable and  responsible for making decisions that  can help the sustainability of the company.

3. Regulatory Compliance: Corporate governance ensures that the administration of your company stays within the ambit of the law. Trust me,  you don’t want to incure unexpected fines or penalties on your company.

Major Consequences of neglecting Corporate Governance Structure for your company are;

1. Legal Issues: Without solid governance principles, your company may violate security and governance rules and may end up paying fines or getting wound up.

2. Mismanagement of Resources: A start-up company without a governance framework can lead to mismanagement of resources. If there is no one to check the company’s manager,  he can take harsh  decision, even at the detriment of the company and where there is no checks and balances no one can be held responsible for not carrying out their duties as they ought to.

3. Difficulty in Attracting Investors: A start-up founder will find it difficult to attract clients for his company if he is unable to create policies that can help him sustain his business. A company that lacks transparency & accountability, mismanages resources and violates laws can’t attract investors.

Lastly, without a governance structure, your company is susceptible to winding up faster.