Small Businesses: How Can You Benefit From Corporate Governance?
There is a perception that corporate governance applies only to government bodies and the large corporates. This is false as, in essence, corporate governance is the process of acting in the best interests of any business and its stakeholders.
In many small and medium sized businesses (SMEs) there is no separation between the owners and management of the entity – they are what is termed owner managed. It often becomes difficult for owners of owner managed businesses to distinguish their personal interests from those of the business.
…..and the Remedy: What you should do about it
- Areas where there is potential conflict between the owners and the business such as the amount of their salaries or the amount of withdrawals they can make,
- A checklist to ensure all laws are complied with,
- Recruitment of independent director(s), and
- Aspects of the business where outside help will be needed such as technology.
Ask your accountants to help – they have both the required knowledge of your business and an independent viewpoint
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