2
What Is Private Company Governance And Why Does It Matter?
In a word, it’s about trust.
Salesforce CEO Marc Benioff is a billionaire who owns about 4 percent of the cloud computing software firm he co-founded in 1999. Before starting Salesforce, he spent thirteen years at database software giant Oracle with Larry Ellison. Today he’s an angel investor in dozens of tech startups.
Consider Benioff’s words about trust: “Trust has to be the highest value in your company, and if it’s not, something bad is going to happen to you.”
Private company governance is about building trust with the people who matter most: investors, creditors, employees, suppliers, and the communities you operate in.
“The nature of a private company means I look in the shareholders’ eyes on a regular basis,” says private company finance leader Don Solman. “In a public company, those shareholders are ‘faceless’ and nowhere near as engaged in the business.”
Solman is vice president and CFO of James Richardson& Sons, Limited (JRSL), a privately owned and operated Canadian corporation based in Winnipeg.
Like Solman, many finance leaders in private companies agree that the best way to build trust is by keeping the business model working efficiently by implementing a suitable structure for private company governance.2 Creating that suitable structure begins with understanding the corporate governance principles that inspire trust. Understanding The Principles Of Corporate Governance
Every private company has its own set of ownership issues, competitive dynamics, and resource constraints to optimize. As
