In a constantly evolving business environment, implementing best corporate governance practices is no longer just a recommendation but a strategic necessity for companies to enhance their competitiveness, access reliable financing sources, and attract investment. Financial institutions and investment funds seek companies that demonstrate solidity, transparency, and commitment to sustainability.
The Consejo Coordinador Empresarial (CCE) has published the latest version of the Code of Principles and Best Corporate Governance Practices, which, since its first edition in 1999, has served as a benchmark for the business sector, providing guidelines to improve management and decision-making in Mexican companies.
This update responds to the growing demands of financial and investment markets, aligning with best practices recommended by the Organization for Economic Co-operation and Development (OECD) and G20, highlighting the following key aspects:
- The importance of social responsibility and the management of environmental, social, and governance (ESG) risks is reinforced as fundamental elements of corporate strategy.
- The need for compliance structures, strong codes of ethics, and effective whistleblowing mechanisms is emphasized to ensure proper regulatory compliance and corporate ethics.
- The integration of diverse profiles in decision-making is recommended, promoting greater gender equity and multidisciplinary experience, thereby fostering diversity and inclusion in the Board of Directors.
- Best practices for the identification and mitigation of financial, operational, and technological risks are incorporated, aligned with international standards to ensure business continuity.
- The need for periodic performance evaluations of the board is established to ensure that its members meet efficiency, preparedness, and commitment criteria.
- The implementation of succession programs for governing bodies and senior management is recommended, ensuring stability, business continuity, and talent development.
- Guidelines for financial, operational, and strategic information disclosure are strengthened, aligned with international governance standards, promoting greater transparency and disclosure of information.
- The importance of digitalization and data protection is recognized, including recommendations on cybersecurity strategies and the use of technology in corporate management.
- For the first time, the role of the Board Secretary is introduced, establishing their profile, functions, and responsibilities within the corporate governance structure.
- Strengthening the role of the statutory auditor is recommended, highlighting their function in supervising business management and ensuring legal compliance.
- Guidelines for establishing family protocols, when applicable, are suggested to ensure the continuity and stability of family business management.
- It is recommended that Boards of Directors formalize their internal processes through operating regulations, clearly defining their responsibilities, functions, and decision-making mechanisms.
- The validity and necessity of Board and Shareholder meetings through telematic means is recognized, establishing criteria for their proper implementation and regulation.
This new version of the Code highlights the importance of placing the human being at the center of business decisions, promoting respect for Human Rights and fostering equity and well-being policies. This approach not only strengthens corporate reputation and sustainability but has also become a key criterion for investors and stakeholders worldwide.
At Ramos Ripoll & Schuster, we are prepared to advise you on the implementation and adoption of these new practices within your corporate structure, ensuring that your company not only complies with current standards but also strengthens its market position and builds investor confidence.
Author:
Flor García Rivera, Partner
Email: fgarcia@rrs.com.mx