The corporate governance agreement is that which binds the capital investors of a business firm to the company. This is a process through which the company assures all the major contributors about the returns to be received on their investment. This is an effective method through which the company manages to prevent any sort of mismanagement in terms of investments and its proper governance. This agreement also highlights the necessary company assets that will be used in cases of non-business projects. This is a practical solution to ensure that the interests of both the company and the investors are safeguarded.
The corporate governance agreement should be constructed in a transparent manner so that all clauses regarding investments can be clearly understood.
There should be proper mention of the managerial and financial functions within the company.
The terms and conditions of the investments should be clearly mentioned along with the legal actions that can be taken in case of failure to comply by both parties.
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Sample Corporate Governance Agreement
Corporate Governance Agreement
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