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Taking your business from the kitchen table to the board room

Hamish Pryde • June 24, 2012

Taking your Business from the

kitchen table to the Board Room

 

Corporate governance is about working on the business not in it.   In other words, being strategic rather than operational.   Your business may have grown from the "mum and dad's" business where the decision making was often done around the kitchen table, and has graduated to the boardroom.

As businesses grow and have more opportunities, it is recognised that outside expertise is required.  Small business owners may be very good at what they do, such as building, transport logistics or making widgets, but Boards of Directors play a crucial role in enabling businesses to achieve their mission or purpose, whether that is to create wealth for shareholders, or to deliver valued services to stakeholders.

Governance is all about getting ahead.   It is about:

#   Knowing where you want to be and how you're going to get there.

#   Good decisions made on the basis of a clear view of the "big picture".

#   Identifying the right opportunities and going for them.

#   Identifying risks and devising strategies to manage them.

#   Putting the interest of your business ahead of the interest of the individuals.

Governance applies to all Companies regardless of their size.   Businesses with a more formal structure tend to develop more quickly, and with a better and more clearly defined direction than those without.

To carry out the governance model you need Directors.   Ideally an independent Director with the necessary skills and expertise is required.   They have no financial interest in the success of the business; therefore their objective independent advice is more valuable.

The office of Director carries with it a wide range of duties and obligations â€" ethical, legal and commercial.   The "tone at the top" influences the whole organisation.   A Director must act in good faith, and in the best interests of the Company.   A Director must also encourage openness to challenge, and independent thinking, contributing to decision making.

A good Board of Directors will help organisations achieve:

#   Greater clarity of roles and responsibilities.

#   A unified understanding of vision, purpose and strategy.

#   Greater accountability and transparency.

#   Better understanding of the compliance environment and risk management.

#   Improved decision making.

#   Enhanced team dynamics and communication.

#   Improved leadership.

An independent Director in a family business should not be there to rubber stamp the will of the founding Director (perhaps the mum and dad owner).   The point of the independent Director is to be objective, to see the bigger picture, and help achieve the bigger goals more quickly. 

A Business Advisor / Chartered Accountant makes an ideal independent Director.

 

 

Hamish Pryde  BBS, MInstD, CA (PP)

 

By Hamish Pryde September 11, 2024
Paper is everywhere. We spend a lot of time and money moving paperwork around. But with today’s technology it is now possible to get rid of paper entirely. Digital documents are simpler, easier to store and send, more searchable and permanent. How long does it take to post a document to somebody via the ole stamp and envelope method, that is snail mail? It is more efficient and timelier to email the document. How many times do you go to print a document at home and find that your printer has run out of ink? Why do we still hold onto printing paper documents? Sometimes it’s just because that’s what we’ve always done and let’s face it change can be difficult at first. Paper alone is cheap. But when you start paying for printers, toner, servicing and maintenance, paper starts to look more expensive. Let alone the storage cost. Paper tax records for seven years can be quite a few boxes of paper. We have embraced some paperless technology as part of a modern business practice. This includes digital signatures, digital collaboration, paperless minutes of business improvement and coaching meetings, electronic work papers and my new digital notebook which I am enjoying. We send questionnaires via email to you to gather vital information to enable us to prepare your annual financial statements. This is a PDF document. Instead of printing the questionnaires you could save the document down into a folder of your choice then edit the PDF document and return to us. How do you edit a PDF document you ask? Once you have opened the document the Adobe online editor lets you do some things for free. The online editor works in any web browser and lets you add text, sticky notes and highlights. Click on the fill & sign button to the right of the document, then in the top toolbar click Iab text button. You can add text directly on the PDF document. Have a try next time you have a PDF document open. Xero and Farm Focus users can attach invoices directly to the transaction loaded into Xero. Then if you are looking at the rates expense in the profit and loss account or farm working account, you can drill down into the rates code and see the transactions. Then attached to each transaction is the rates invoice if you use this great functionality. All invoices can now be stored in the cloud. So why paperless? Productivity - electronic documents are instantly and simultaneously available to everyone who needs them. Reduce waiting times with less risk of loss or damage. Cost savings - you will save money on printing, postage and associated costs. You could pay less rent because you won’t need all that space for your files. Security - electronic documents are more secure than printed ones. Digital records can be password protected and rendered unreadable through encryption. Printed documents are only as secure as their proximity to a copy machine. Reduced Clutter - paperwork on desks and shelves are not only untidy it’s inefficient too. The organisation of digital files is simpler and your office will look much neater. That will help you clear your mind to focus on your business. Environmentally friendly - less printing means fewer trees cut down for pulp and less energy used to make and transport paper. Disaster recovery - if there is a fire or flood, recovery from the backup is much easier with digital storage them with paper. There are great help articles available in Xero or Farm Focus if you are not attaching invoices to payments already. To find out how click on the links below: If you would like to explore ways you can go paperless we can help.
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