Are you confused as to why you are reading about Corporate Governance. Isn’t it the kind of thing that’s normally associated with large complex businesses?
If you are in the UK and you search ‘Corporate Governance’ you are faced with the’ UK Corporate Governance Code’ which talks about accounting periods and The Listing Regime, so you would be forgiven for thinking, that it isn’t relevant to your start-up.
But, putting in place a good Corporate Governance framework from the beginning, sets the foundations for your business as its grows and scales.
What is Corporate Governance
Very simply, It is the framework that outlines the way in which you manage your business, including:
Who does what: the key roles and responsibilities from the Founders, CEO, CTO etc. to the Directors and Shareholders, their involvement in making key business decisions and the responsibility, accountability and authority that they have for the running of the business.
How you go about it: Board Meetings, procedures and rules that are in place to ensure that you manage, control and operate the business effectively.
Corporate Memory: critical for investor due diligence. The key business documents from your Certificate of Incorporation through to Insurance policies and employee contracts.
Why is it important
Saves you Time: if you can get Corporate Governance right from the start will save you time in the long run. Taking time to understand and set- up a Governance framework, secures the foundations around
- how you want to run your business
- who is responsible for what
- how you go about making complex decisions
- how and when you are going to meet and communicate with Stakeholders
A Governance timetable reduces the time spent and the anxiety of doing these things reactively with poor preparation and planning.
Better decision making
Every business has hundreds of decisions to make.
- If you have set out the way in which you manage complex decisions and you know who to include in the decision making process then you can limit and mitigate the potential for errors and mistakes that can ultimately cost the business time, money and its reputation.
- Setting up a proper Board of Directors and regular Board meetings, with an Agenda and a Board pack, including updated financials supports better decision making.
Transparency and accountability builds trust
Having a transparent framework in place reduces ambiguity in the business and holds your feet to the fire; thus making sure that you lead by the example that you have set.
A willingness to be open, honest and straightforward about the business lays a strong foundation of trust with your Stakeholders.
Every entrepreneur, when they start a business, want their business to be a success, to be the best place to work, with a fabulous culture and a business that investors want to invest in.
Having a strong Corporate Governance framework, that is in evidence, enhances your success in securing investment and keeping current investors onside. As a result, it demonstrates that you are serious about running a successful business and underpins a culture of trust and transparency.
Being in Control
There is no way of getting away from it Corporate Governance generates paperwork, actions and deadlines. However, having a failsafe solution for maintaining all of your data and deadlines is critical. We call this your Corporate Memory. You may also have heard it referred to as your Due Diligence information or Data Room
It isn’t a waste of time setting-up your Corporate Memory, because if you have all your business critical information available at any time and you can share correct and current information immediately easily to investors and stakeholders.
Being in control can make the difference in securing investment quickly.
5 things that you must do and how Deputi.AI can help
- Understand the importance of Corporate Governance
- Build a Governance framework for your business
- Maintain an accurate Corporate Memory of all your business critical data and deadlines
- Set-up and run effective Board Meetings
- Communicate effectively with your Stakeholders