All companies must look at their organizational structure and continually assess what will allow the company to perform optimally. The easiest way to implement this is to have an advisory council. The advisory board are unpaid individuals who have specific business or industry backgrounds who can contribute ideas or mentor management. In more formal and traditional cases, a small corporation has a board of directors comprised of the founders, a spouse, an employee, and maybe, just maybe an outside director. The focal point of corporate governance within small businesses is that all businesses must establish strategic business goals, provide the leadership to implement them, oversee the management of the business, and, if the business has shareholders, report back to shareholders. on its management. . For those small companies that do not have the hierarchical structure to implement formal corporate governance plans, it is recommended that regular self-assessment of the company be the starting point for accountability, to improve performance, grow the company and be a major contributor. strength in the economy. At the end of the day, if you follow some set of policies and procedures and report to someone from your company management, even if it is your dog, then you have a responsibility that is key to corporate governance practices.
Will the government impose its will and definition of Corporate Governance from public markets to the environment of small companies?
This imposition of government of the companies of the public market to the private companies makes its way in the corridors of the congress. One idea that is included in current legislation is to extend Sarbanes-Oxley to private companies. Anyone who knows anything about SOX is aware of the high cost of implementing the documentation and reporting processes. Bringing this into the small business environment would be cost prohibitive and hamper economic growth. The general policy of mandatory corporate governance is to wait and see how the new legislation will affect the small businesses that power the American economy.
As a final note, all companies, regardless of their size, will see the positive effects of implementing corporate governance principles. The facts are, there are more than 27 million small businesses in the US that are job creators and drivers of the economy. The greatness of American businesses is that they perform best when people come together in a free market environment to meet the needs of the economy and society. In the end, best corporate governance practices can be freely implemented to benefit the company, or the government can institute corporate governance, which can cost more in resources, planning, and profits. Take the time to assess how your small business views corporate governance and how this will enhance its growth in the marketplace.