If you’re a company director, you have the same corporate governance responsibilities as a director of a major public company, even though you’re running a much smaller business.
Directors are responsible for appointment of a chief executive officer or a general manager and then monitoring the overall performance of the company. This means that directors’ meetings should be held regularly. The directors should receive written reports on all matters to be discussed at the meeting, preferably at least 48 hours prior to the meeting, so that directors can read the material prior to the meeting.
Directors should be conscious of declaring any interest that they have in matters being discussed at the Board of Directors’ Meeting. There are many items to be considered under corporate governance, including:
- Ensuring assets are purchased in the company’s name.
- Ensuring that any borrowings the company does are at the best possible terms.
- Implementing a system of internal control throughout the business.
- Reviewing budgets and cashflow forecasts.
- Ensuring regular financial reports and key performance indicators are prepared and analysed.
- Ensuring the staff are employed under appropriate agreements and that staff evaluations are conducted on at least an annual basis.
- At each Board of Directors’ meeting, seeking assurance from the company’s principal accounting officer that all debts are being paid in the normal course of business.
- Ensuring management is reviewing any environmental issues that may affect the business.
- Enquiring as to whether appropriate risk management strategies have been implemented relative to the Personal Property Securities Register (PPSR).
Management strategies for other events that may affect the business have been introduced, including weather, armed robberies, death or inability of key personnel to perform their duties.