In an increasingly complex and challenging world, corporate governance has become an essential element for business resilience and long-term success. It ensures informed and responsible decision-making, promotes an ethical and transparent culture, prevents misconduct and, therefore, protects company and investor interests—while ensuring that risks and opportunities are managed effectively.
Strong corporate governance extends beyond the business realm, generating a positive impact on the economic and social environment. When companies operate with transparency, proper controls, innovation, and responsible management, they reduce corruption risks that may affect their reputation and sustainability. At the same time, it protects stakeholders (investors, suppliers, employees, customers), builds trust, encourages fair competition, increases productivity, among other advantages.
This was demonstrated by an MSCI analysis of the corporate performance of U.S. companies over a nine-year period (between January 2015 and December 2023). The findings showed that, in developed markets, companies with strong corporate governance practices achieve better financial results, less volatility in their valuations, more stable earnings, and greater resilience in adverse scenarios or potential crises.
However, in emerging markets, the signal was less clear—highlighting the need to promote regulations that establish minimum corporate governance standards. This will help strengthen local competitiveness and level the playing field globally, enabling more equitable and sustainable growth.
For these reasons, it is essential to elevate governance practices to prevent risks, capitalize on opportunities in a more demanding global environment, and provide strong investor protection.
Below are eight key steps companies can take to reinforce their corporate governance:
1. Integrate Risk Management as a Competitive Advantage
This means identifying and assessing how potential risks can affect different stakeholders, as well as business operations and objectives, and then establishing proactive mechanisms to manage and mitigate those risks effectively. It translates into greater adaptability and responsiveness to crises, market disruptions, and regulatory changes, strengthening organizational resilience. It also improves the company’s ability to innovate, seize opportunities, and operate sustainably in uncertain and volatile environments.
2. Governance of Data, AI, and Cybersecurity
The evolution of emerging technologies—especially AI—brings significant opportunities but also new risks that can lead to financial losses, reputational damage, and exposure of private information, among other negative impacts. To address this, companies must implement effective technology governance with clear data-management policies, supported by strong cybersecurity guidelines that include risk matrices, robust protocols, periodic assessments, continuous training, and a comprehensive incident-response plan. Active involvement from senior management is essential in this area.
3. The Power of Transparency and Smart Reporting
Companies must ensure clarity and accessibility of all relevant information—both financial and non-financial. This enhances the quality of reporting on risks, opportunities, and sustainability practices while providing a comprehensive view of performance, strategy, and long-term challenges. Transparency and accountability strengthen stakeholder trust, foster stronger relationships, and encourage continuous improvement.
4. Diversity as a Driver of Innovation and Resilience
When boards are more diverse in terms of gender, nationalities, skills, and experience, they benefit from richer perspectives and more effective decision-making. Diverse viewpoints help companies better address business challenges and opportunities, while also promoting a dynamic organizational culture that positively influences employee engagement and satisfaction.
5. Ethical Culture as a Reputational Shield
In a global and interconnected world where risks can spread rapidly, companies must have effective compliance programs. These programs should not only prevent corruption and misconduct, but also foster a culture of integrity throughout the organization—from senior leadership to operational levels. This will not only protect the company from corporate crimes, but also strengthen governance and stakeholder trust.
6. Incentives Aligned with Purpose and Responsible Performance
Effective compensation structures are a cornerstone of corporate governance, as they help attract and retain talent while influencing organizational behavior. When incentives align with sound practices, they encourage not only the achievement of results but the pursuit of those results in the right way. Proper implementation of these plans reinforces trust, transparency, and ultimately long-term value creation and sustainability. Companies should adopt comprehensive, fair, and consistent compensation systems that promote productivity and ethical behavior, ensuring competitive pay while maintaining equity across the organization.
7. Integrate Sustainability into Strategy
Embedding sustainability into the core of the business and its operations enables alignment between strategic objectives and responsible values. By prioritizing sustainability, companies can respond to external demands with greater transparency, ethics, and accountability—enhancing reputation among stakeholders and opening opportunities for new markets and investment.
8. Shareholders as Strategic Partners
Facilitating active shareholder participation through enhanced voting and communication mechanisms ensures their voices are heard and their interests remain aligned with the company’s long-term goals. Keeping an open and ongoing dialogue about performance, strategy, and key decisions strengthens trust and commitment, promoting more inclusive governance and improving the ability to attract investors.
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Strong corporate governance translates into more dynamic, resilient companies—better able to adapt, achieve stronger financial results, and unlock greater investment opportunities.
The challenge is creating a level playing field so that companies—across both developed and emerging markets—can grow and respond with resilience in a globalized environment. This requires robust regulatory frameworks, but above all, governance practices that ensure fair competitive conditions. Only then will we activate a virtuous cycle that fuels corporate success, strengthens economic growth, and benefits society as a whole.
