Good governance planning is reliant on structure, effective operations, and controls.
These three key areas should be working in harmony to achieve the long-term goals of all stakeholders. Stakeholders include the shareholders or owners of the business, and also the employees, customers, suppliers and even creditors. All of which should be working on the governance planning within your business.
At a base level, good governance allows a business to keep operating, so that:
- Shareholders, or owners, continue to invest in the business
- Funders, such as banks, continue to fund the business, during times of growth as well as through difficult times
- Team members continue to have faith in the business and are engaged in their roles, meaning we have the best possible chance of retaining them
- Customers continue to support the business, perhaps even increasing their annual spend and referring new business
- Suppliers continue to supply the business and provide credit because they sense a stable business environment
- And finally, regulators such as tax bodies and other authorities allow the business to continue as it’s meeting all its obligations
Benefits of booking a session
- Better governance brings a planning focus, and the outcome of better planning is better implementation and execution of new business opportunities
- It enables better support from funders, which is essential when your business is experiencing rapid growth, or when times are challenging. Because you’ll devote a little more time to working on your business, as opposed to being solely focused on the technical aspects, you’ll also put strategies in place to improve your working capital and overall cashflow
- Part of wearing the governance hat involves assessing and mitigating risks in the business, rather than adopting ‘laid back’ or ‘she’ll be right’ business practices. Tackling risks head on simply helps you, as a business owner, sleep better at night
- Regularly putting on your governance hat encourages you to focus on how your business is structured from a people perspective, including roles and responsibilities. Simple changes to your structure can help you step back from the business and have more discretionary time if that’s what you want
- And finally, good governance maximises the value of the business for shareholders. This is an overarching objective of governance
Many business owners naturally get confused between their governance role and their operational role, for example, managing a team of people or selling to customers. A natural question some of you might have right now is ‘Does governance really apply to a small business?’. Or ‘How big does a company need to be to benefit from a governance structure?’ We strongly believe that most businesses, even smaller ones, will benefit from more effective governance.
For smaller, less complex businesses, a quarterly meeting cycle may be adequate. For more complex businesses, those in high-growth mode, or where you’re experiencing unusual trading conditions or have significant opportunities or risks to address, monthly may be advisable.
In fact, in the current business environment, some Boards are meeting more frequently.
The Next Steps
We can provide you with a complimentary Annual Governance Work Schedule so you can plan your governance tasks and actions for the coming year. For those of you who may have recognised that they need help with your governance structure, we can work with you to develop a Governance Framework Plan. This will explore the Four Pillars of Governance, the 10 Hats Organisation Structure, Board Composition, Core Values, Purpose and Vision.
It’s likely that many of you have identified several gaps in your current governance approach.
Planning for sustainable improvement starts with you and your co-directors, so make a clear plan that you can articulate to your Board.
Focus on what you can do in the short term as opposed to worrying about getting everything in place at once. And remember, we are here for you and want to help.
For a complimentary Discovery Call to discuss the most appropriate level of support on a wider basis, a personalised quote and a guarantee of our best possible service, please complete the form below and one of our senior advisors will contact you.
Or if you prefer, please call 01296 681341 for our Wingrave Bucks Accountants office.