Strong corporate governance policies can be the glue that holds your business together. Good governance can help business owners develop trust between employees and managers, as well as foster excellent communication between owners and other stakeholders. Developing coherent corporate governance policies not only gets your company started on the right foot, but also creates a lasting model for business success.
If you are a small business owner running a Tennessee professional corporation, corporate governance is even more critical. After all, you chose a professional corporation as your business entity structure because you are a licensed professional. The importance of corporate governance in your business can help you maintain the data and financial records that are critical for your profession. For nearly 150 years, the experienced lawyers at Batson Nolan PLC have helped small business owners handle corporate governance matters. Read on to find out how we can help you develop a robust corporate governance program and navigate any potential challenges.
What Is Corporate Governance?
Corporate governance is the system of rules and policies used to govern your company. Strong corporate governance policies typically cover both the social and institutional aspects of managing a business. The main goals of corporate governance include:
- Serving as a system of agreed-upon policies, procedures, and principles that corporate stakeholders use to work through corporate conflicts;
- Controlling interactions between various corporate stakeholders and participants; and
- Ensuring ethical and economic transparency.
While different types of businesses may have additional or different corporate governance goals, these three typically cover the basics. The benefits of corporate governance are numerous. Strong corporate governance usually helps businesses communicate clearly with internal stakeholders like management and employees and external stakeholders like shareholders or counterparties.
Creating a Strong Corporate Governance Framework
Now that you understand the importance of corporate governance, how can you build a corporate governance framework that works for your professional corporation? The three most important things a company can include in a strong corporate governance framework include:
- Creating a written system of responsibilities, rights, and rewards for owners, managers, and employees;
- Developing procedures to reconcile conflicts of interest—both internal to the company and between the company and third parties; and
- Crafting supervisory procedures for day-to-day company management, as well as checks and balances on management power.
Speak with a Batson Nolan PLC attorney today to see how we can help you develop your professional corporation’s governance framework. Whether you are a dentist or an architect, all professional corporations can benefit from good corporate governance policies and procedures. Let us help you build a better business today.
The Benefits of Corporate Governance in Professional Corporations
As a licensed professional with a small business, you may wonder why you need to go through all the trouble of creating governance policies. One significant benefit that professional corporations can reap from strong corporate governance policies is taking advantage of remote work environments. Since the onset of the pandemic, professional corporations like law firms and certain types of financial and medical providers have wanted employees to work from home but needed to have policies in place to protect personnel, assets, and data.
Over the past two years, responding quickly to transition has been necessary for many licensed professionals. However, switching to remote work environments has created the risk of cyberattacks and data theft. Professional corporations and business organizations with solid governance policies in place, especially those with robust cybersecurity policies, have been able to accommodate both client and workforce needs and adapt more easily to a new normal.
If you are ready to speak with a member of the Batson Nolan PLC team about how to develop good corporate governance policies for your professional corporation, contact us today. We can help you navigate this “new normal” and prepare your professional corporation for whatever comes next.
Building Good Corporate Governance in Professional Corporations
Professional corporations come in as many shapes and sizes as there are licensed professions. Likewise, there is no one-size-fits-all approach to corporate governance. With a few guiding principles, you can start to think about what corporate governance means within the context of your profession. That way, when you meet with a knowledgeable Tennessee business and corporate lawyer, you will understand the importance of corporate governance and have an idea of what you want your governance policies to look like.
In building your professional corporation’s corporate governance, regardless of your industry, three guiding principles may help you develop your strategy. Those guiding principles include:
- Select an appropriate board of directors;
- Prioritize oversight and risk management; and
- Ensure integrity, equitable treatment, and transparency.
By following these ideas as you develop your corporate governance policies, you may find that you will also be able to meet the various standards of your licensed profession. If you have reporting requirements that you must comply with for your professional license, having excellent corporate governance can make meeting your professional licensing obligations easier. The Batson Nolan PLC team has extensive experience helping lawyers, doctors, architects, and all kinds of licensed professionals and professional corporations develop good governance. Contact us today to discuss your corporate governance.
How Batson Nolan PLC Can Help
The Business and Corporate Law Group at Batson Nolan PLC has years of experience representing businesses of all sizes, from sole proprietorships and professional corporations to large companies. We work with clients in a wide range of commercial law matters. Whether your needs are entity formation, business acquisitions and contract negotiations, or the purchase or sale of a business, we develop relationships with our clients and assist with legal matters through all phases of business ownership.
Our Clarksville, Tennessee, business attorneys work closely with professional corporations to develop corporate governance strategies and policies at all stages of business. Whether you are just forming your business entity or you are an established business ready to “professionalize” your operation, our attorneys can help. Contact us today to discuss the Batson Nolan PLC difference and how we can help your small business thrive.