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Why policies matter for businesses
Corporate Governance results from a historical growth of corporate structures that have become more complicated over time.
As the number of stakeholders changed, the move towards a more collaborative and demanding relationship also changed. As a result, challenges require new alignment and guidance for strategic implementation.
Since the guilds of the Middle Ages, corporations have represented a group of connected people. They have shaped society with their influence and reach, serving as primary hierarchical structures. In addition to possessing political power, corporations have promoted science, art, education, and entertainment, and have also organized trade expeditions. Their overall goal is simple: to generate wealth for sponsors.
As times changed, corporations evolved into complex systems with multiple power structures, and today they consist of a mix of “influential personalities” with different interpretations of how to generate and distribute wealth. It is unsurprising that in such a reality, companies do not always act consistently. Without any overarching principles or policies, the divergence in how and when to generate wealth can be destructive.
