Governance - are you in control?
An introduction to directors duties and corporate governance for SMEs
There is a habit when starting out, to think that as it’s only you and perhaps a co-founder, why bother with governance? You don’t have the time or you are under pressure to sell, produce and market your business.
The serious bit…
However, the longer you put it off, the more it can cost you, through fines, penalties and if severe enough, prison. That’s right, being a company director comes with some mighty consequences under company law. Also, there are EU directives and other regulations depending on where you trade, that you have to be mindful of.
Therefore make the time, it might mean missing a few social events but set a few hours aside a month to keep up to date with your responsibilities.
When you create a company and become a director you have what is called Fiduciary duties. Basically having ultimate responsibility. Therefore you should be a trusted figure and expected to hold yourself to the highest standard of care to protect the assets of the business.
Spending too much time on the fun flashy stuff might cost you a lot more in the future and it will put off investors. You will have to start questioning your decisions far more. Giving favours to friends and family when not in the best interest of the company, are not acceptable.
Once a company is registered the bulk of this foundation work happens in the first month of a formation. After this, due diligence and record keeping becomes more familiar and require less of your time, as they become the habit. So to get started:
The company secretary usually looks after minutes. The Chair supervises and can have a deciding vote. Minutes can either be kept in a book or online/electronically. There are plenty of cloud/app solutions out there or hire a virtual PA to minute your meetings.
The above list is a starting point, depending on your sector there may be further legal requirements such as licensing, permissions to import/export certain materials, local laws, financial regulators, ISO certifications etc.
Speak to industry experts and research your sector.
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