Corporate governance is often discussed by reference to governance codes, international principles, and best practices. These are useful reference points. However, in practice, corporate governance should not be approached on the basis that one framework can simply be adopted and applied uniformly across all entities.
Each entity should have its own corporate governance framework.
Even where entities form part of the same group, each company remains a separate legal person. It is subject to its own governing law, regulatory environment, constitutional documents, management structure, and operational realities. For that reason, governance should not be treated as a matter of copying and pasting the same framework from one entity to another without proper consideration.
Good governance requires more thought than that.
Governance frameworks should be tailored, not replicated
There is often value in having group-level governance standards, internal policies, or overarching principles that provide consistency across the wider organisation. Similarly, governance codes and international principles, including ISO governance principles, may offer useful direction in considering what good governance should look like.
However, these should be used to guide judgement, not replace it.
A governance framework is only meaningful if it is appropriate to the entity to which it applies. If the framework does not reflect the legal, structural, and practical realities of the company concerned, it may exist in form but not operate effectively in practice.
Corporate governance should therefore not be treated as a standard template capable of being replicated without adjustment across different entities.
Each entity operates within its own legal and regulatory context
One of the most important reasons why governance frameworks should be tailored is that each entity must comply with the laws and regulatory requirements of the jurisdiction in which it is incorporated or operates.
This may affect, among other things:
- the duties and responsibilities of directors;
- shareholder approval requirements;
- board and shareholder meeting procedures;
- filing and record-keeping obligations;
- constitutional requirements; and
- local governance expectations imposed by regulators or authorities.
A governance framework that is appropriate in one jurisdiction may not necessarily be sufficient, appropriate, or even compliant in another.
For this reason, local law and regulatory requirements should always be properly considered when designing or adopting governance arrangements for any entity.
Separate entity, separate governance consideration
Even within the same group, entities may differ significantly from one another.
For example, one entity may be an operating company, while another may be a dormant entity, a holding company, a joint venture vehicle, or a special purpose vehicle established for a specific project. Their governance needs may differ accordingly.
The composition of the board may also differ. The level of shareholder involvement may differ. The nature of the business, the approval processes, the risk profile, and the internal reporting lines may all differ from one entity to another.
In such circumstances, it would be unrealistic to assume that the same governance framework can simply be applied to all entities without adjustment.
Good governance requires proper consideration of the role and function of the specific entity concerned.
Governance codes and ISO principles are guidance, not a substitute for judgement
Governance codes and internationally recognised principles can be useful in shaping the overall approach to governance. They may help establish a framework for accountability, oversight, transparency, responsible decision-making, and organisational direction.
However, they should not be treated as materials to be adopted mechanically.
The purpose of governance principles is not to encourage uniform wording across all organisations. Rather, it is to guide entities in developing governance arrangements that are appropriate, effective, and capable of operating in practice.
A company should therefore consider such principles carefully, but also apply judgement in determining how they should be reflected within its own governance framework.
The existence of a governance code or international principle does not remove the need for entity-specific analysis.
Why copy-and-paste governance can create problems
Where governance frameworks are adopted on a copy-and-paste basis, several issues may arise.
First, the framework may not align with local legal or regulatory requirements. This creates an obvious compliance risk.
Second, the governance structure may not reflect how the entity actually operates in practice. As a result, the framework may become largely theoretical, with little practical relevance to how decisions are truly made or implemented.
Third, the approval processes, authority lines, or reporting structures may be inappropriate for the entity’s actual size, complexity, or operational needs.
Fourth, the copied framework may create confusion as to roles, responsibilities, or decision-making authority, particularly where it uses language or structures borrowed from another entity with a different governance model.
In these circumstances, the issue is not only that the framework is imperfect. The more serious concern is that it may give the appearance of governance without providing a framework that is genuinely workable, accurate, or defensible.
Good governance requires substance, not only documentation
In practice, a governance framework should not exist merely because a policy or document has been prepared. It should exist because the entity has properly considered how it ought to be directed, controlled, and governed in light of its own circumstances.
This means that governance should be designed with substance in mind.
The framework should reflect the entity’s actual operating environment, the responsibilities of its board and management, the role of shareholders, the legal requirements of the jurisdiction, and the practical processes through which decisions are made and recorded.
Good governance is therefore not about adopting the most polished framework or the most comprehensive wording. It is about having a framework that is suitable for the entity and capable of being applied properly in practice.
A more disciplined approach to governance design
In considering the governance framework for an entity, it may be useful to begin with a number of practical questions.
- What are the legal and regulatory requirements applicable to the entity?
- What does the entity’s constitution require?
- What is the nature and purpose of the entity?
- Who sits on the board, and what role does the board actually play?
- What matters should be reserved to the board, shareholders, or management?
- What approvals, reporting lines, and internal controls are appropriate for this entity?
- How should governance principles be applied in a manner that is proportionate and workable?
These questions help shift the focus away from documentation alone and towards governance that is properly thought through.
That, in substance, is what a governance framework should achieve.
Final thoughts
Each entity should have its own corporate governance framework.
This does not mean that every entity must create governance arrangements from the ground up without regard to group standards, governance codes, or international principles. Those materials can provide useful guidance. However, they should inform governance design, not replace proper consideration of the entity’s own circumstances.
Corporate governance should therefore not be approached as a copy-and-paste exercise.
A sound governance framework is one that is properly considered, legally and operationally appropriate, and tailored to the specific entity concerned. It should reflect the reality of how the entity is governed, not merely the appearance of governance on paper.
In governance, consistency may be helpful, but appropriateness remains essential.
Civernyx 
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