A corporate entity is a business structure formed specifically to perform activities, such as running an enterprise or holding assets. Although it may be comprised…
Corporate governance is a process by which a corporation is directed, managed and run. Organized properly, it serves as the foundation for business decisions supporting enterprise growth and stakeholder value.
Healthy engagement between stakeholders, the board of directors and company management is paramount for the profitability, productivity and market positioning of a business. These functions are a particularly important element for attracting long term investors and capital.
Organizational documents are key to the legitimacy of a business and its growth. Primary here are corporate formation and operational documents which provide a clear articulation of business activities.
The business structure utilized depends on the type of entity a founder chooses to run and the jurisdiction they’re in. A corporation is codified by way of a Certificate of Incorporation (also known as an Articles of Incorporation), along with associated bylaws that outline operating procedures.
These documents form a corporation’s basic charter governing management, operations, and equity holders’ rights.
Today it’s not uncommon to see founders ignore proper corporate governance practices in their haste for a quick business launch and market presence. And as is often the case in a rapidly growing industry sector, this oversight can run afoul of stringent and rapidly evolving regulatory requirements and requests for transparency.
Moreover, early investors and stakeholders often overlook these governance shortfalls in their quest for a quick investment return.
One example of this involves cases where a founder may offer a verbal or handshake promise of equity or stock options to employees or advisors without any sort of documentation. The same with corporate restructuring or even a vendor arrangement that occurs without an agreement to reference back to.
All of this underscores the importance of facilitating and adopting proper documentation practices. As a business owner, you can avoid headaches by implementing strong corporate governance practices right out of the gate. This involves bringing order to your bylaws, operational documents, and agreements, ensuring that your business is consistently operating within established parameters and approval protocol.
Shawn Owen is the CEO of Equa an enterprise on the cutting edge of document simplification where from creation to execution, agreements are smartened into living adaptable core components of an organization. He had this to offer about the launch of the business:
“I think there were a lot of different elements that probably led up to this idea culminating. It involved some big ideas that I’ve had for a long time along with a lot of different experiences which led me to my own theories around how businesses should operate and function.”
Owen says that the ultimate spark for deciding that this was an idea that needed to happen on the heels of the pain he had experienced running a previous business.
“I had many moments of deep reflection where I began asking myself, ‘why is this so complicated, why is this so hard?’”
He found that the document process to be rather arduous, often involving the review of something that occurred in the past in order to identify the best, most accurate outcome for people to agree on. But at the end of the day, he says, it was all basically about the efficient execution of agreements and recordkeeping.
Asked about the value proposition of Equa as a solution to this, Owen added:
“Broadly speaking, we’re using technology that’s specifically focused on delivering a quality business user experience around documents and agreements, all with the aim of providing a single source of truth for the records.”
“With all of the technology that we have in the world that we live in, I kept thinking, ‘shouldn’t there be a better way of keeping records without all of this unneeded overhead and complexity?’ When things start to become too complex, you start wondering ‘why is this, this way?’ I’ve always been a big fan of simplifying things if there is an easier way”
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