The Importance of Strong Corporate Governance for Privately Owned Medium-Sized Manufacturing Companies in the Construction Industry
- Kaspars Senvalds
- Mar 26
- 4 min read
Modular Construction. Smarter Structures. Stronger Foundations.
Why Corporate Governance Matters More Than Ever
In today’s unpredictable business climate, corporate governance isn’t just a nice-to-have — it’s essential. For privately owned, mid-sized companies like Nordic Homes, good governance builds the structure needed to scale sustainably, manage risk, attract capital, and earn trust.
“The absence of disaster isn’t proof of success. Governance ensures things keep going right — not just that they haven’t gone wrong yet.”
What Is Corporate Governance?
Corporate governance is how a company makes decisions, manages accountability, and balances stakeholder interests. It covers:
Decision-making systems
Oversight and compliance
Strategy and risk management
Roles and responsibilities
For a company like Nordic Homes, it’s not just about checking legal boxes. It’s about creating a resilient, smart, and trustworthy business that stands out in a competitive, capital-intensive industry.
Why It Matters for Medium-Sized Private Manufacturing Firms
1. Smarter Decisions
As companies grow, informal decision-making starts to break down. Governance provides structure, improves clarity, and ensures that choices are strategic — not reactive.
Pro Tip: Use formal procurement policies and decision frameworks to evaluate vendors, materials, and strategic partnerships.
2. Better Risk Management
Construction is full of risks — cost overruns, delays, regulation shifts, and more. Governance supports systems like risk registers, audits, and contingency plans that protect against disruption. EY research shows that well-governed firms recover faster from shocks and face fewer financial setbacks.
3. Trust and Reputation
Whether you’re bidding on a public tender, entering a JV, or trying to win over a multinational client — trust is key. A transparent governance model builds confidence in your company’s stability and ethics.
4. Access to Financing
Banks and investors want to see maturity. A board, clean books, and clear strategy help unlock better funding terms and open doors to institutional capital. BICG (www.bicg.eu/) research links strong governance with lower credit risk perception and better investment conditions.
5. Succession Planning
What happens when a founder retires? Governance helps secure the company’s future by building systems for leadership development and continuity.
6. Regulatory Compliance & ESG Readiness
With rising ESG standards and increasing regulations in manufacturing and construction, governance ensures the business stays compliant, sustainable, and ahead of policy shifts.
ESG = Environmental, Social, and Governance. It’s not just a trend — it’s the future of business.
What Good Governance Looks Like in Practice
You don’t need to act like a public company. But you do need smart, right-sized structures that fit your growth stage and industry.
Key Elements:
Advisory or supervisory board with independent members, Nordic Homes has had multiple compositions of Advisory board over the last five years, with a tailored made approach for each phase of the development of the Company.
Defined leadership roles (clear lines between management & oversight)
Documented internal controls (finance, procurement, conflict of interest), Success for Nordic homes lays in a regular improvements in already established systems.
Strategic planning process (annual review, board-level involvement, employee surveys and market research forms the basis of the planning for us)
Risk management routines (annual assessment on shareholder level and advisory board level is a must)
Regular reporting (dashboards,, financial performance, stakeholder updates, etc.)
The Nordic Homes Context: Modular Construction Needs Stronger Systems
Modular construction is growing — fast. But it’s also more complex than traditional builds:
More moving parts
More tech
More suppliers
Higher expectations from buyers
This makes governance a competitive advantage. Clients want to know their modular supplier is structured, reliable, and future-ready. That starts at the top — with how the company is governed.
We are proud to be a member of Baltic Institute of Corporate governance (https://www.bicg.eu/members/) already for few years, and we are in continues process of improving our knowledge in the Corporate Governance topics. Janis Goloveckis has successfully obtained the Board Member Education Certificate this week and Kaspars Šenvalds holds the certificate of Board member as well as Chairman.
We Believe In A Simple Governance Roadmap for Mid-Sized Firms
No need to overcomplicate. Start where you are and build from there:
Phase 1: Foundation
Self-assess current governance maturity
Define company values & governance principles
Appoint an internal governance champion
Phase 2: Structure
Set up an advisory board (at least 2-3 external expert, with no fiduciary duties)
Document key policies (procurement, ethics, financial control)
Phase 3: Process
Hold annual strategy reviews with board input
Develop a 4 step annual cycle with quarterly topics
Launch quarterly advisory board meetings
Train management in governance practices
Phase 4: Maturity
Based on the company`s situation, propose a rotation of the advisory board member to facilitate the strategic guidance
Benchmark against well regarded governance models
Breaking the Myths
“We’re too small.” “It’s too expensive.” “We’ve done fine so far.”
These are the most common excuses — and also the most dangerous. Governance is scalable. You don’t need 10 board members or a compliance department. You just need the right structure for your size and goals.
Final Thought: Governance Is a Growth Tool
Corporate governance isn’t a checkbox. It’s a growth tool. It supports innovation, improves operations, attracts talent, and opens new markets. If Nordic Homes wants to lead in real-estate development and modular manufacturing industries, then governance is not a cost. It’s a strategic investment in trust, transparency, and long-term success.
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