Reputational boostВ вЂ“ Transparency in a companyвЂ™s internal policies, control mechanisms and how it deals with its suppliers, vendors, media, staff and government bodies will boost its reputation and thus its brand value.Transparency, especially regarding everything of interest to investors, will command a lower risk premium, therefore lowering the cost of capital and equity. Deciding on an appropriate capital structure is thus a key element of good corporate governance. Improved capital flowВ вЂ“ An increase in confidence by investors and banks in the company due to robust financial management reporting will not only improve access to capital, but also minimise both cost of capital and cost of equity, resulting in an optimised capital flow.A good governance framework will also induce reflection on exit strategies, giving additional comfort to prospective shareholders deciding whether to invest in the company. Risk mitigationВ вЂ“ An effective corporate governance framework helps to mitigate risks, providing shareholders in non-listed companies with the comfort that although their exits may be difficult, their interests will be safeguarded by the board and management.In practice, how does good corporate governance contribute to building value? Good corporate governance builds trust and predictability, hence generating comfort to investors вЂ“ a consideration manifest in the ESG requirements (Environmental, Social, Governance) of a growing number of Private Equity funds across the world, particularly in impact funds. With non-listed companies as the main component ofВ a nation's economic fabric, the role of good corporate governance in enhancing shareholder and investor value should not be minimised. While the drive for good corporate governance is generally associated with publicly listed companies, the governance benefits to non-listed companies are less often talked about вЂ“ in many countries, national codes of corporate governance set out practices and standards that are desirable but not mandatory for non-listed companies. It involves a set of relationships between a companyвЂ™s management, its board, its shareholders and other stakeholders. Put simply, corporate governance is a framework by which a company is controlled and directed in the most effective way. Business Development Director, John FГ©licitГ© examines the key benefits of good corporate governance and how it has become a pre-requisite to reaping investor confidence and unleashing shareholder value.

Good corporate governance adalah