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Many private limited companies are owned and controlled by a single individual or families. Whilst these companies may not be faced with the same issues of maintaining relationships between their board and shareholders as listed companies, corporate governance remains essential as a platform for growth and success.
Good governance is not just about compliance with formal rules and regulations. It is about establishing internal processes and attitudes that add value, enhance the reputation of your business, make your business more attractive to external investors and lenders and ensure its long term success.
Historically, there has been little guidance for unlisted companies on good corporate governance but awareness has increased following the publication of the Institute of Directors’ 14 principles of corporate governance. Highlights for private limited companies include:
Good constitutional framework
Effective board of directors
Identifying and managing risk
Successful businesses don't get to the top by chance. They get there with the right people driving them forward with the right ethos, in the right market. But good corporate governance can also help companies achieve success faster as well as ensuring that the company is attractive to external investors and purchasers.