ABSTRACT
The practice of governance is a sound way for any organization to manage risk; it leads to more predictable outcomes, with decreasing volatility from controllable factors. As a risk management strategy, if properly structured and managed, corporate governance practices will likely lead to long-term benefits regardless of the size or type of organization. For non-public entities, how the company is run or how it finances the business may not be subject to elaborate regulatory requirements. The final category, non-profit organizations, comprises mostly incorporated legal entities that pursue charitable causes and seek tax exempt status from the Internal Revenue Service. Family businesses start small and have a simple ownership structure, such as sole proprietorship or partnership. Family business governance runs the spectrum from informal, unstructured governance to a highly visible, structured, and formal governance. Private companies have the choice of issuing stock and having shareholders, but their shares are not traded on stock exchanges.
