Governance issues are increasingly relevant to companies even if they do not have immediate plans to go public.
Companies can also be subject to corporate governance standards because either the operating agreement explicitly adopts the fiduciary duties imposed under a particular state corporation or because emerging case law has begun to impose on companies certain corporation based governance standards such as the fiduciary standards for members, managers, and officers.
Furthermore, as banks, insurance companies, and other service providers adopt and come to expect governance standards from their public company clients, it is inevitable that they will begin to look toward private companies to meet these same standards. As such, private organizations, like Flippbox, have established new fiscal and management responsibility policies to avoid problems which could interfere with their futures.
Good corporate governance ultimately requires people of integrity. Personal integrity cannot be regulated. However, Flippbox believes that stakeholder confidence is enhanced when the company clearly articulates the practices by which it intends directors and key executives to abide.
We also realize the importance of recognizing and managing risks and have established a sound system of oversight and management and internal control. This system has been designed to identify, assess, and monitor risks as well as inform stakeholders of material changes to Flippbox's risk profile.
Aside from the need to effectively manage risks and support compliance with legal obligations, there is also the broader issue of maintaining and enhancing our corporate reputation. Corporate credibility is generally based on notions of legitimacy, fairness, and ethics and our board realizes its responsibility to set the tone and oversee adherence to our code of conduct.