Corporate governance ensures the right people are the ones making the important and right decisions. Having a good corporate structure can help you ensure the start-up of your business occurs without any problems and reduces confusion about responsibilities. If you intend to grow your business, having established procedures and processes in place may ensure that your growth occurs smoothly.

Corporate governance is not just for companies - small businesses need corporate governance too.

1. Create and delegate authority

Set up a process that communicates clear lines of authority, so you can help your staff understand which decisions they can and can't make on their own. Corporate governance structures combine policies, guidelines and codes. These documents balance the needs of the business with the engagement of stakeholders. The types of documents and number of documents will differ depending on your business.

2. Develop policies and procedures

Develop policies and procedures to reach your business goals.

Procedures are a record of processes that your staff repeat frequently. Develop procedures which communicate clear steps to achieve a set goal, such as a sale of a product.

Policies are clear, concise, and easy to understand. Your policies should reflect your brand. Create policies that compliment your business goals and objectives and your risk management plans.

You and your staff will make better decisions when you have formal policies and procedures in place. Policies and procedures provide three beneficial outcomes in a business:

  • They provide legitimacy to a decision.
  • They guide behaviours through an agreed process.
  • They reduce risk within your business.

Once created, make your policies and procedures available to all staff. You should revisit these documents to ensure they're up to date.

3. Manage employees and ensure accountability

Current policies and procedures allow all staff to be more accountable and comfortable when they make decisions.

Develop policies and procedures that:

  • assist managers to provide constructive feedback to staff
  • ensure better decisions are made in the future
  • provide staff with more responsibilities

Streamlined policies and processes allow you to focus on other core management activities that can help make your business a success.

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