The most crucial part of any company, the one thing that can determine its success or failure, is the quality of its management. Corporate governance theories recognize this fact, and provide methodologies by which a corporation may be directed, administered or controlled.
In today’s corporate world, the reality is that most public companies have many, many owners, not all of whom can have an equal say in the management of the company.
Corporate governance provides for a structure in which stockholders may have a voice, as well as including management, the board of directors, regulators, employees, suppliers, partners, customers, and the community in which a company exists.
That is a lot of voices!
By providing rigid structures like shareholder meetings and specific information like annual reports, corporate governance makes listening to all these voices a manageable task. Software and training play a large part in the smooth day-to-day governance of any company as well.
If corporate governance was all a company had to worry about, that would be fine. But things change. Today, things change very quickly. Not only do companies have to be concerned about listening to all the voices of their constituents, they also have to be ready to change management structures when it becomes necessary. To manage risk BEFORE the inevitable crises hit. To provide for constant management solutions in any given situation. Most of all, they have to be ready to manage change itself.
Sometimes established businesses need a change. It may be due to rapid growth, or plans for rapid growth. It may be due to mismanagement by a current executive, or a government investigation. Or it may be due to the takeover of the company by another, who may not want current management in place. Whatever the management issue is, the transition can be eased by one of a variety of management solutions.
When a business changes, it needs to focus on the things that are changing. That’s where change management comes in, involving the development of a planned approach to change. The objective is not necessarily the change itself, but rather ensuring that all parts of an organization involved in the change have an adequate chance to be involved in the process. It ensures that you don’t change your distribution system but neglect to take into account your inadequate mailroom, for instance.
Project management brings in a consultant (who may, with some types of projects, ultimately become a regular employee) to manage a specific project. It might be a capital campaign for a nonprofit, the building of a large building, or even a new software system. Regardless of the project, a specialized project manager makes it easier to integrate your new piece into your company.
When a company is changing management completely, or when they’ve lost a key management member due to misfortune, an interim manager may be in the works. Interim managers are typically experienced executives who have developed their management skills specifically so that they can step into unique or awkward positions at a moment’s notice and enable you to run your company smoothly while you seek a replacement.
When a company has transitioned through its first changes successfully, it can at last be said to be a mature and viable entity. From inception through corporate governance through its first major change, your company’s growth is analogous to a human’s growth from birth through childhood through the changes of adolescence, and finally into adulthood. Good management, like good parenting, ensures a successful transition through each of these stages, ending in the creation of a good corporate citizen.