When people hear the term “Governance,” there’s often a collective sigh. It conjures up images of a formal, outdated boardroom with a group of older executives in suits. But is that really what governance looks like today? Yes and no. Yes, we still see some of these traditional setups, but no, that’s not what governance should be about in the modern business world.
So, what is governance? Well, ask ten people, and you’ll probably get ten different answers. A straightforward definition, though, comes from Matt Fullbrook, creator of the “One Minute Governance” podcast: Governance is creating the conditions for the best decisions to be made.
When you think of governance this way, it doesn’t necessarily require a boardroom. Even a sole business owner can create conditions for better decision-making. It could mean seeking advice from knowledgeable contacts, or setting up regular strategy sessions with your management team.
Setting up your business for growth involves some fundamental governance practices that support better decision-making, add value, and reduce risk. Here are some essential areas to consider:
1. The Governance Team
Do you have a small, diverse group of people who bring different perspectives and aren’t afraid to challenge the status quo? A strong and successful advisory board can provide a range of advice and benefits, helping you navigate the increasingly complex issues directors face today. If you have gaps in expertise or insights, think about who you could bring in to cover these areas.
2. Strategy
Strategy often sounds complex, but at its core, it’s simply what your organization is doing now to meet customer needs and achieve your goals. To refine your strategy, clarify your organization’s purpose, understand where you currently stand, and define where you want to go. Then, consider the strategic choices that will bridge that gap.
Ask yourself:
- What assumptions are driving our strategy? Are they realistic, and do they align with our vision?
- What could disrupt our strategy? Identifying downside risks helps you plan for them, while considering upside potential can reveal opportunities for accelerated growth.
- Are our resources, processes, and capabilities aligned with our strategy? If not, what changes are necessary to support our goals?
Focusing on these questions alone can significantly enhance your governance practices, helping you build a resilient foundation for sustainable growth.
Final Thoughts
Good governance doesn’t just prevent issues; it sets your business up for long-term growth and adaptability in an ever-evolving environment. If you’re curious about how governance could benefit your business, feel free to reach out to Carole Pedder, Director at PKF Withers Tsang. Carole can offer practical insights and advice tailored to the unique challenges and opportunities your business faces, and help you explore the range of benefits that strong governance brings.