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Your Guide to Effective
Corporate Governance
What is Corporate Governance?
Corporate governance facilitates the effective and prudent management of a company by its board of directors. The board sets a company’s strategic aims and establishes the leadership structure to achieve these, which in turn helps the company provide services, meet stakeholder needs, and deliver its long-term success. The governance framework covers all aspects of company management.
The framework is designed to establish:
- The rules and policies;
- The brand of service delivery;
- Client relationship management;
- Community relationships;
- Risk management practices; and
- The organisational structure.
In this resource, we discuss what you need to know about effective corporate governance and the related services that add value to your business. Plus, insights straight from Bolder Group’s governance experts!
The Principles of Good Governance
An effective corporate governance framework encapsulates elements of government regulations, company-implemented regulations, community commitment and ethical business practices relevant to the firm’s country of operations.
In 2023, the G20/OCED published its “Principles of Corporate Governance” to guide firms in designing their corporate governance structure. According to the Principles, the corporate governance framework should:
- Promote transparent and fair markets, consistent with the rule of law;
- Ensure the equitable treatment of and protection of all shareholders, including minority and foreign;
- Provide incentives throughout the investment chain and provide for stock markets to function in a way that contributes to good corporate governance;
- Ensure timely and accurate disclosure on corporation matters, such as financial situation, performance, sustainability, ownership and governance;
- Ensure strategic guidance of the company and board accountability; and
- Provide incentives for companies and investors for decision-making and risk management to contribute to the company’s sustainability and resilience.
Know-Your-Customer (KYC) processes are fundamental to sound corporate governance, particularly in financial services. Not only does an effective KYC framework mitigate the risks of money laundering, terrorist financing and other financial crimes, but it also protects your company’s reputation and the integrity of the financial market. A robust KYC system demonstrates your organisation’s firm commitment to ethical business practices and compliance with regulations and industry standards.
But what makes an effective KYC program? Download our free guide to check out the standard Bolder design for a KYC framework. Click the link:
Bolder Group’s Guide to Designing Your KYC Framework
Designing AML/CFT controls
Money laundering is a generic term describing the process by which criminals and their associates conceal the origin or derivation of the proceeds of crime so that those proceeds appear to be derived from legal/legitimate sources, thereby avoiding prosecution, conviction and confiscation of the criminal proceeds.
Terrorist financing, on the other hand, is the collection, receipt, mobilisation, transfer, or concealment of funds with the intent or knowledge that such funds will be used to facilitate the commission of a terrorist act by a terrorist, terrorist group or non-state act.
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Read more: The differences between money laundering and terrorist financing
Financial crimes are a serious threat to society and global economies, especially amidst globalisation and rapid digitalisation. The challenging task of mitigating and financial crimes are becoming more intensified with the advancement of such money laundering techniques, as well as the exploitation of technology in finance.
That is why it is crucial for market participants and companies providing financial services to have rigorous AML/CFT policies in place. Such systems significantly contribute to the fight against crimes funded by illicit money. To do your part, how should you design your anti-money laundering (AML) policies as part of your governance framework?
It is important for AML/CFT controls to implement a risk-based approach (RBA), so you can efficiently allocate your resources, mitigate risks and enhance your decision-making, as well as adapt to changing risks. Here’s how you apply RBA:
- Conduct a comprehensive assessment to identify and understand the inherent risks associated with clients, products/services, transactions and geographic locations.
- Implement tailored controls and measures that are proportionate to the identified risks, focusing resources and efforts where the risks are highest.
- Apply enhanced due diligence measures for high-risk clients, which involve gathering additional information, conducting more in-depth background checks, and obtaining senior management approval.
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Complying with regulatory requirements
Apart from establishing robust KYC and AML/CTF measures, you must also meet other regulatory requirements to be in good standing with the government and relevant authorities. But if you’re managing funds, businesses or vehicles in multiple countries, how do you keep track of everything you need to file or report?
Here’s our solution: we have compiled the relevant reporting and filing requirements this 2025 in major economic centres in one compliance calendar.
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With this calendar — and our solutions — you will never miss a regulatory deadline, ensuring compliance and avoiding fines.
Download your own copy!
The board of directors is an integral component within an organisation’s corporate governance framework as well as playing a key role in translating the said framework into an effective governance operating model. A director’s primary responsibility is to fully understand the company and how it operates by:
- Monitoring its financial position
- Ensuring that those in charge of the finance function have the necessary skills, knowledge and experience to perform their responsibilities effectively
- Continually reviewing the company’s strategy in view of changing circumstances
- Ensuring the Company’s risk management programme is effective
- Seeking professional advice on all material matters not within the directors’ knowledge, skill and experience.
- Acknowledging and mitigating potential risks via different controls
According to Bolder Group’s Head of Directorship Services, Terence Garcia, whilst acknowledging that distinct vehicles and corporate structures may merit a tailored approach, there are certain key principles which directors should always aim to adhere to, as follows:
- Act with integrity
- Act in the company’s best interests
- Exercise due care, skill and diligence
- Act within the powers granted
- Disclose any conflict of interest or take actions to mitigate or eliminate the conflict
- Carefully observe statutory and legal, regulatory and legal obligations
Related resource: The role of independent directors
Lack of transparency: The board does not effectively and transparently communicate with the shareholders on matters relevant to them, such as financial disclosure and company standing.
Incompetent board of directors: The board consistently makes poor decisions that harm the company. It lacks adequate industry knowledge and clear strategic direction and fails to anticipate significant risks and challenges that could otherwise be addressed. Incompetent directors also do not embrace the changes brought by time and market conditions.
Weak board structure: The roles and responsibilities given to each director are unclear, which may lead to inefficiencies and, sometimes, conflicts. Additionally, the board does not have key committees that are crucial to overseeing certain aspects of the company and its operations. A weak board structure may also result from the lack of diversity and succession plans that prepare potential future board members.
Ethical lapses: A company or its employees engage in illegal or unethical activities that may negatively affect the company, shareholders and the market. Such activities include accounting fraud, insider trading, social concerns, environmental harm and deceptive market practices.
Stale policies and procedures: The company implements policies and procedures that have not been updated or properly reviewed to align with relevant laws, technological advancements and changing business needs. Outdated policies and procedures may result in compliance issues, legal exposure and operational inefficiencies.
Poor risk management: Without adequate risk management strategies, a company may fail to assess and address operational, financial and reputational risks. These may be caused by poor risk monitoring and control practices, lack of board oversight and insufficient resources allocated to risk management activities. Consequently, the company may suffer financial losses, reputational damage, legal fines or operational disruptions.
Avoid these mistakes within your company by seeking the assistance of our governance professionals. From compliance to directorship services, our governance experts will help you lay down a solid foundation for your company, protecting you from legal trouble and reputational risks. Contact us for more information.
Bolder Group's Corporate Governance Services
At Bolder, we emphasise the importance of governance and compliance in every aspect of our workflow and product delivery. That is why we have an in-house team of legal and compliance experts across our 18 jurisdictions who provide comprehensive governance services to meet your compliance and regulatory requirements.
From UBO screening to KYC, directorship and reporting services, our diverse governance and compliance solutions are designed to keep your business sustainable amid changing regulations.
Your Contacts
David Payne
Global Head of Governance
david.payne@boldergroup.com
Terence Garcia
Head of Directorships & Board Governance
terence.garcia@boldergroup.com
About Bolder Group
Bolder Group is a result of the merger between legacy companies AMS Financial Group and Circle Partners. Bolder has been providing clients globally with governance, corporate, funds and family wealth solutions for over 45 years. The firm is independent and privately owned. Bolder is present in 18 countries across Asia, EMEA and the Americas.
Bolder Group does not provide financial, tax or legal advice and the information contained herein is meant for general information purposes only. We strongly recommend that before acting on any of the information contained herein, readers should consult with their professional advisers. The Bolder Group accepts no liability for any errors or omissions in the information, or the consequences resulting from any action taken by a reader based on the information provided herein.
Bolder Group refers to the global network of independent subsidiaries of Bolder Group Holding BV. Bolder Group Holding BV provides no client services. Such services are provided solely by the independent companies within the Bolder Group which are each legally distinct and separate entities and have no authority (actual, apparent, implied or otherwise) to obligate or bind Bolder Group Holding BV in any manner whatsoever. The operations of the Bolder Group are conducted independently and have no affiliation with third party financial, tax or legal advisory firms or corporations.