Fiduciary Guaranty Smart GovernanceTM Program
To the typical challenges that all commercial enterprises face, there are a few additional ones that accrue to closely held corporations and family owned businesses. Most of these challenges derive directly from the market perception that the quality of corporate governance is compromised in the closely held corporation. Notice our invocation of the term “market perception.” Sometimes “perceptions are reality” in the minds of investors, regulators and the pesky plaintiff’s bar.
Access to capital – either debt or equity issues – can be restricted because of the widely held belief that the directors are less likely to think independently of management and to hold management accountable to “best practice” standards. This is especially troublesome when the board IS management. The need for either outside directors OR a third party-monitored decision making process … becomes imperative to open the money spickets for debt and equity capital.
Pressing the firm’s competitive advantage in the marketplace depends on capably prosecuting a portfolio of complex, interrelated value-creation and risk-attenuation tasks. The judgemental component of these decision tasks is very demanding. Without the Board having been conferred with a superior decision making capability – it is unlikely that the firm can optimize its competitive positioning.
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