Corporate governance is a set of practices, processes and standards that aim to ensure transparency, equity and accountability in the management of a company. For growing organizations, adopting a robust governance structure is not only desirable but essential to ensure sound management, attract investors and promote sustainable growth. This article explores the importance of corporate governance and how it can be a lever for the success of growing companies along with the structuring of an exclusive investment fund for the company.
What is corporate governance?
Corporate governance refers to the system by which companies are directed and controlled, involving interaction between shareholders, board of directors, senior management and other stakeholders. Its main objective is to ensure that the company is conducted in an ethical, efficient and transparent manner, minimizing conflicts of interest and ensuring a balanced management of the various interests involved.
The fundamental principles of corporate governance include:
Transparency: Clear and accessible disclosure of relevant information to all stakeholders.
Accountability: Managers’ responsibility for decisions and management of company resources.
Equity: Ensure that all shareholders and stakeholders are treated fairly and equally.
Social and environmental responsibility: Consideration of the social and environmental impacts in business decisions, aiming at long-term sustainability.
Why corporate governance is a crucial factor for companies
Growing companies face a number of challenges, such as the search for capital, the need to professionalize management and adapting to an increasingly competitive market. Corporate governance provides a solid framework to overcome these obstacles in an effective and strategic way.
- Attraction of investors
In a challenging economic environment, investor confidence is crucial. Companies that adopt good corporate governance practices transmit greater transparency and minimize risks, which makes them more attractive to investors and sources of financing. The implementation of these practices facilitates even the preparation for a public offering (IPO), expanding the possibilities of raising funds.
- Professionalization of management
As a company grows, the complexity of its operations also increases. Corporate governance allows the creation of structures such as boards and audit committees, which help in making strategic decisions and supervising executive management. This ensures a more professional and long-term management.
- Reduction of risks and conflicts
The adoption of structured governance contributes to the mitigation of conflicts of interest and fraud by establishing clear roles and responsibilities for all involved. Transparent and responsible management reduces the risks of wrong decisions or diversion of resources, creating a more secure and reliable corporate environment.
- sustainable growth
A governança corporativa ajuda as empresas a se concentrarem no crescimento a longo prazo, com práticas que consideram não apenas os lucros, mas também os impactos sociais e ambientais de suas ações. Ao adotar critérios de sustentabilidade e responsabilidade social (ESG), as empresas podem consolidar um modelo de negócios mais resiliente e capaz de gerar valor contínuo para todos os stakeholders.
How to implement corporate governance in growing companies?
Growing companies can adopt corporate governance practices in a gradual but strategic manner. Some key measures include:
Setting up a board of directors: The formation of a board with independent and qualified members provides an impartial external view, essential for strategic decision-making. This board also acts as a supervisory mechanism for executive management.
Internal and external audits: The implementation of regular audits, both internal and external, ensures that operations are in compliance with legal and regulatory standards, as well as identifying areas for improvement.
Codes of ethics and compliance policies: Establishing a code of ethics that guides the practices of all employees and managers is essential to prevent conflicts of interest and ensure integrity in the company’s operations. Compliance policies also ensure compliance with legal standards, avoiding legal risks.
Transparency in disclosure: Transparency in financial and operational information is essential to create trust among investors and other stakeholders. Companies that adopt this practice strengthen their relationship with the market and facilitate the process of attracting new resources.
Companies that implement sound corporate governance practices tend to stand out in the market and attract the interest of large investors. Startups that have adopted these practices from the beginning, for example, were able to professionalize their management, access new markets and attract significant investments.
In the case of family businesses, corporate governance has also proven to be an effective tool for ensuring business continuity across generations. The creation of independent boards and the professionalization of management allow these companies to maintain their growth and evolution trajectory.
How to apply governance strategies to attract investors?
Corporate governance not only contributes to more efficient management, but also sets itself up as a “magnet” for attracting new investment opportunities. In the current economic scenario, where credit is more restricted, adopting good governance practices can be decisive to demonstrate the viability of the company and win new resources.
Promote transparency: Ensure that all stakeholders have access to clear and accurate information about the company.
Increase operational efficiency: Improve internal processes and increase competitiveness in the market.
Reduce risk: Adopt governance practices that enable more detailed data analysis and help reduce the company’s vulnerability to market changes.
Comply with regulatory standards: Ensure that the company is aligned with legal and regulatory requirements, avoiding legal problems and costs with fines.
These actions make the company more attractive to investors and sources of financing, making the organization more resilient and able to grow in a sustainable way.
Funds that assist in good corporate governance practices
Private Equity
Financing through Private Equity (PE) is an excellent opportunity for companies that do not have open capital and are looking for new ways to expand. One of the main requirements to attract such investors is the adoption of a solid governance structure, which ensures greater trust and transparency.
Good governance facilitates the attraction of PE funds, since investors seek companies with professional management and well-defined internal controls. These funds provide capital so that companies can implement growth strategies, carry out acquisitions or reorganizations, always with the support of a structured governance model.
Investment in private equity usually implies greater influence on the management of the company by investors. PE funds usually require seats on the board of directors, which allows for more stringent control over the company’s operations. This can accelerate the implementation of good governance practices, such as the creation of audit committees, internal process reviews and management professionalization.
However, the governance structure may be impacted by the need for alignment of interests between the founders and PE investors. In some cases, there may be a power imbalance if PE investors take on a more dominant role in decision making.
FIDC (Credit Law Investment Fund)
An IFCD is an excellent tool for companies that seek to structure their governance in a more robust way. The main advantage of a FIDC is that it requires greater transparency in management, which strengthens corporate governance. FIDC funds are required to account for their operations in detail, which includes auditing their credit portfolios and disclosing financial information to investors. This level of transparency not only increases market confidence, but also provides an environment of greater control and professionalism in the management of the company.
Structuring a FIDC that is unique to the company can bring several benefits, especially when it comes to raising funds and maintaining control. Among the main advantages, we highlight:
Fundraising without dilution of control: Unlike an IPO or Private Equity, which requires the issuance of shares and may dilute the control of the founding shareholders, the issuance of credit rights in the FIDC does not change the allowing managers to retain decision-making power.
Increased transparency and credibility: The requirement of regular audits and detailed disclosure of financial information to investors ensures greater transparency. This level of control helps to improve the company’s reputation in the market, which can facilitate access to new sources of financing in the future.
Flexibility in fundraising: FIDC offers a more flexible alternative for companies seeking to increase their capital. The structure allows companies to decide which credit rights will be assigned to the fund, allowing a fundraising adjusted to the needs of the organization.
Financial sustainability: Raising funds through the FIDC can help the company to finance long-term projects and strengthen its financial sustainability, by allowing it to have access to a continuous flow of capital without compromising the independence or structure of the company.
Strengthening supplier relationships: Investing in strategic partners improves supply chain stability, ensuring better trading conditions and opportunities for innovation.
New financing modalities: If the product your company sells or manufactures does not have a financing modality in the market, a customized solution can be created for your FIDC. Thus, you will have a great differential in the market, being able to finance your clients, individuals as well as legal entities.
Employee credit: Create your own credit line for employees. Instead of going to a bank, they can take credit from the FIDC, with payment deducted directly on paper.
What is the ideal solution for my company?
The choice between FIDC and Private Equity depends on the specific objectives of the company and its stage of development. For companies that seek to maintain control and already have a robust receivable flow, FIDC can be the ideal alternative, as it offers greater flexibility and less dilution of decision-making power. In addition, it strengthens corporate governance through transparency and the requirement of regular audits.
On the other hand, for companies that are looking for accelerated expansion and are willing to give up part of their control in exchange for significant capital and management expertise, private equity may be more advantageous. It provides the capital needed to grow rapidly and the strategic orientation of investors, as well as ensuring the implementation of more sophisticated governance practices.
In both cases, the adoption of good corporate governance practices is crucial to ensure that fundraising is successful and that the company grows sustainably with efficient and responsible management.
