I recently attended the Australian Institute of Company Directors Course at Customs House and was inspired by an excellent program. It seemed to me that companies and how they manage their business are all bound by the same principles and affected by many of the same issues. Here are a few points worth considering:
1 Culture: Someone said “culture eats strategy for breakfast”. Maybe they are right and it takes strong and focused leadership to ensure culture develops in the right way. Make the rules about how you do business known and live by them as a Director;
2 Strategy: Without really knowing and understanding what you are about you cannot ever hope to reach your goals. Have a formal session each year and if you need it, get an external facilitator. make sure the team understand it so they can explain it in one sentence in a lift. Refresh this every year;
3 Financial Competency: The learning examples used included a family business secured by a family home with a basic balance sheet. As a Director if you cannot understand the numbers using 8 simple steps then you should resign.It is being able to read what is happening to a company that drives those numbers so you can make critical decisions;
4 Effective Decision making: As a key platform all business owners have to make decisions. By having a structured process every time you are far more likely to make superior decisions for the long term sustainability of the enterprise.
5 Compliance & Risk: If you do not know the legal and accounting compliance and risk requirements then find someone who does. make sure you establish clear procedures to invest in these so the business is protected and maintained as much as possible. Establish a risk appetite based on your culture and purpose. Scenario planning is a great way to find out what you would do if the worst happened. Test your capacity to respond;
6 Board Composition and Effectiveness: If you cannot perform the role then find someone who can. There are plenty of people who can source the right Director to give the company the energy, the experience and the ability to make your business succeed. Get a Chair who can manage the group and make sure you balance the dynamics between board members, the CEO and the stakeholders.
If you would like assistance with any of these issues please take the first step and ask, cheers