Every business organisation needs to have good governance in place, but what exactly does it mean? Corporate governance is the system of rules, processes and policies put into place in order to monitor and control an organisation. Just like a good family has certain rules to establish responsibility, leadership and who does what, so a business has to have the same kind of thing. Only because a business has so many parts to it, the governance is rather more comprehensive than a family would need.
Even small businesses have to have some kind of governance in order to progress smoothly. People within the company from the janitor to the CEO have to know who is responsible for what and who is to make what decisions. It also encompasses certain rules and regulations set out by the government that businesses must adhere to, to be legal.
Input for a governance framework can come from an individual director, company counsel, outside commercial lawyers, a board of directors and officers in the company. It takes into account the kind of business it is and whether there are stakeholders or other shareholders who must be considered. It delineates duties and responsibilities appropriately and where delegation of duties is carried out ensures there is clear and proper understanding of what is to be done and by whom. Effective governance will ensure that the business runs smoothly and safely right from the start, as each person’s skill set will be used to carry out the work they are best suited for.
Some elements of governance include:-
- Risk management
It is by governance that those in positions of authority and those who work in a company are held to account for their actions and decisions. It ensures transparency, trust, stewardship and integrity as well as accountability.
You can get training in this area if you feel it is necessary for your business. This will enable you to know what governance rules should be put into practice in your business and how to apply them. Don’t be frightened off by the thought of training. A mere half a day is considered enough to give you all the information needed to understand the essentials of governance and how they apply to your particular business. You can do the course online or find out where it is offered in your capital city.
This will help you to set goals and objectives for your company, show you how to reach those goals as well as how to monitor them so you know that all is going according to plan. It will also help you to avoid pitfalls and to find out when something is going wrong in time to correct it and so avoid a potential disaster.
It is not easy to start and run a business, so everything possible to make it a smooth and easier undertaking should be considered. Once you have all the right knowledge on how to best run your business it will make a big difference to your life and stress levels. You will become a more confident person and be able to facilitate all the necessary segments of your business so that they come together seamlessly. Governance need not be complicated; it is often simply ethics and common sense put together.