What does good corporate governance look like?

Good corporate governance is when boards see governance as an advantage, not a chore. Meetings spark real debate, directors challenge assumptions, and risk management and strategy are woven together.

How do you define good corporate governance?

The best way to understand what defines good (strategic) corporate governance is to compare it with “box-ticking” or compliance-driven governance.

Compliance-driven governance is all about the minimum. Board meetings here are performative or minimal, where directors nod through management’s decisions, risk discussions focus only on what regulators demand, and committees – where they exist - speed through agendas to tick the boxes.

Our Board Value Index reveals that many boards are concerned they fall into this category: nearly half of directors feel their boards don’t add value, with 31% saying they add no value at all, and some even believe boards actively hinder the organisation. Key barriers include rigid processes, unclear roles, poor time management, and low-quality information. Fewer than half of boards focus more on forward-looking strategy than past performance.

Papers often land too late and are too dense to be useful (our research has proven that), and directors aren’t expected to deliver value beyond ticking boxes. This is the type of governance that keeps you out of trouble, but rarely helps you run a better business.

Strategic governance flips the mindset. Here, boards see governance as an advantage, not a chore. Meetings spark real debate, directors challenge assumptions, and risk management is connected to strategy rather than bolted on.

Committees add depth, board packs are clear and purposeful, and directors are chosen for what they contribute, not who they know. When strategy is involved, management understands how to anticipate risks and change course based on board input.

The difference is night and day. Compliance governance is like strapping on a seatbelt to avoid a fine, while strategic governance is like having a co-pilot who helps you navigate. And the results show up in performance: strategically minded boards consistently outperform those that treat governance as a mere necessity.

Why are strong governance structures important?

Strong corporate governance structures are essential because they anchor trust, accountability, and long-term performance. They give boards the tools to make informed, ethical, and strategic decisions while ensuring that risks such as cybersecurity threats and climate pressures are managed effectively.

The challenge, however, is that boards must balance oversight with agility, keeping pace with shifting regulations, rising stakeholder expectations, and the complexities of AI and global supply chains. In uncertain times, good governance is a safeguard and the foundation for resilience and growth.

According to McKinsey’s 2025 Global GRC Benchmarking Survey, companies globally see room for improvement in governance, risk, and compliance (GRC). Yet few are bucking the trend with smarter, more effective capabilities. And as we know, weak governance is a business risk.

While 93% of organizations included in the survey say they have a governance framework in place, nearly half admit they lack basic tools like formal procedures, manuals, or inventories of board resolutions. Even board oversight falls short, with only about half documenting annual assessments. This leaves critical gaps in performance and accountability.

McKinsey makes the case clear. In 2025, governance is no longer about compliance alone; it must be tied to strategy, risk, and resilience. Boards operating without robust governance structures are “winging it” in a world defined by geopolitical shocks, climate change, and AI disruption.

Those with strong, well-documented governance frameworks are not just better protected, they’re also more agile, trusted, and positioned to seize opportunities while others are scrambling to catch up.

What are the key traits of good corporate governance?

Megan Pantelides, Senior Director of research at Board Intelligence, says that boards that are aware of their strengths and weaknesses and interested in understanding performance are more likely to be effective because they can course-correct.

So, what does good governance look like in practice? Good governance is about creating the conditions for organizations to thrive through these distinct traits:

1. Transparency

Transparency means providing clear, timely, and accurate information to the board, shareholders, and stakeholders. Honest reporting builds trust and allows directors to make well-informed decisions. You can’t have an effective board without also having an effective management team. The collaboration element is key.

2. Accountability

Accountability ensures that directors and executives are answerable for their decisions and actions. A culture of accountability strengthens oversight, discourages complacency, and shows investors and regulators that the organization takes its responsibilities seriously.

In practice, accountability also empowers directors to challenge constructively and follow through on agreed actions.

3. Fairness

Fairness is about treating all stakeholders, from employees to shareholders, with equal respect. Boards that apply fairness in governance avoid conflicts of interest and balance short-term pressures against long-term sustainability.

Fair treatment of stakeholders (which includes embedding them in decision-making processes) strengthens the organization’s reputation, employee loyalty, and, ultimately, the company’s license to operate.

4. Responsibility

Responsibility goes beyond compliance; it’s about recognising the board’s role in stewarding the organization for long-term success. Responsible boards consider the wider impact of their decisions on society, the environment, and future generations.

This broader lens supports sustainable business models and strengthens resilience in an increasingly volatile world.

What are some examples of good corporate governance in action?

Megan notes that there are examples of highly successful businesses that win repeatedly because they have governance structures enabling decision-making at pace, prioritisation, and insight.

These boards sustain competitive advantage by focusing on innovation while striking the right balance between backward-looking discussions, such as financials, and forward-looking strategic planning.

Here are five real-life examples of what good governance looks like.

1. Microsoft’s detailed sustainability reporting has been recognized as a model of transparency, giving stakeholders confidence in its long-term commitments. By contrast, companies that withhold key information (as seen in several high-profile ESG disclosure cases) often face regulatory scrutiny and reputational fallout.
   
2. After the Wells Fargo account fraud scandal, the board restructured its governance framework and introduced stronger oversight mechanisms to rebuild accountability and regain stakeholder trust.
   
3. Salesforce has been noted for its commitment to pay equity and stakeholder fairness, helping it attract and retain talent while strengthening its corporate reputation. In contrast, boards that neglect fairness often face employee unrest or shareholder activism.
   
4. Patagonia sets a high bar: its governance is built around environmental and social responsibility, aligning business practices with broader societal outcomes. Similarly, publicly listed firms like Apple have started tying executive pay to ESG targets, signalling responsibility as part of core governance.
   
5. Morgan Stanley executed a planned CEO succession in 2023, moving from James Gorman to Ted Pick. Years of board-led evaluation and mentoring of internal candidates ensured a smooth transition and maintained stability and investor confidence.

How can boards improve governance standards?

Boards can improve governance standards by moving beyond traditional frameworks and using technology, such as board reporting software, to make oversight smarter, faster, and more strategic.

Board Intelligence’s board portal facilitates secure, paperless meetings with features like version-controlled board packs, action tracking, and AI-powered insights.

Use these top tools to improve your board’s governance standards:

Agenda Planner

One of our most useful tools for improving governance standards is the Agenda Planner. The Planner helps boards work smarter by structuring meetings around key priorities. With Agenda Planner, you can map out a full year of board meetings and instantly see where time and attention are really going. While it remains an excellent scheduling tool, its real value is that it helps boards balance past performance with future strategy and spot blind spots before they become problems. And it’s based on the Board Intelligence Six Conversations model, to help the board identify mission critical discussions.

Board evaluation

Boards can strengthen governance by reviewing their effectiveness regularly. Board Intelligence’s approach to board evaluation, the 5 I’s methodology, has been developed over two decades to assess the five pillars of an effective board: Individuals, Information, Infrastructure, Innovation, and Impact.

Our flexible approach means we can adjust the focus on each pillar to align with your organization’s needs while meeting governance requirements. And the board gets practical recommendations to challenges informed by data-driven insights and human expertise.

Ultimately, improving governance today means blending technology with strategy. Platforms that streamline administrative tasks, provide actionable intelligence, and enable real-time oversight allow boards to focus on strategy and high-value decisions that drive long-term sustainable performance.