Governance of your small business can help it flourish, and it doesn't mean an expensive, over-qualified board of directors. Governance structures for small businesses can take many forms. Your governance set-up can evolve through the life of your business to give you the right kind of support at the right time. The good news is that it's never too soon or too late to establish governance for your company.
Governance gets you focused on the big picture
Governance is simply about ensuring time and expertise are allocated to working on your business, rather than only in your business. It's about dedicating thought to the big picture. Governance can help with strategic challenges and opportunities that arise and to meet your overall objectives.
The bottom line benefits from good governance, and that's not all. Your company's unique character, stability, productivity, resilience and growth can be better supported with a well-executed governance plan. If you intend to sell your business, good governance can also show investors that there's more than you that’s gluing everything together. And taking some of the pressure off yourself as an owner is also valuable.
Structures range from a professional board to 'do it yourself'
Boards of Directors are often associated with large corporates. But there are many different structures for governance, and it's important to find one that suits you. At one end of the spectrum are bigger paid boards, usually with independent directors and various committees with a particular focus. For example, an Audit and Risk committee may have people with specialist technical knowledge that can offer deep expertise in that area.
At the other end of the spectrum is a simple do-it-yourself model where governance comes down to you and any other active owners. With this approach, having a Business Mentor is more important than ever. Without the objective, external perspective they bring, you'll miss out on the benefit of diverse thought, different experiences and be at risk of blind spots.
An advisory board gives guidance without obligation
Many small and medium businesses find a structured approach somewhere between the two ends of the spectrum, where owners are part of the board or an advisory board offers advice without legal obligation.
An advisory board can give you expert guidance, but its members are not directors, so they don't make decisions. This can be a good option if you need guidance in specialist areas such as fundraising, health and safety or scientific information. Many small business owners formalize an arrangement with their accountant in and advisory role. They often have good knowledge of industry trends and benchmarks.
Family businesses can fare better with governance
Many businesses grow from an entrepreneurial idea and are led by couples or families. Managing these relationships, running a business and contributing to sound governance can bring pressure and big demands on your time. This is just one reason why a structure that defines roles can help everyone feel empowered.
Start by getting genuine guidance on governance
If you'd like to know more about which governance structure would benefit you, a Business Mentor is one of the best people you can speak to. They'll give you their unbiased insights and the benefit of their own experience. The genuine, generous conversations you can have with a Mentor are unlikely to be replicated anywhere else. If you don't yet have a Business Mentor, you can apply today.
To make the most of your Mentor's gifted time, you can prepare with information available online. Business.govt shares plenty of resources here.