As a director, you are a leader. As a leader, you are responsible for the actions and inactions of your company, its successes and its failures, its culture and its decisions. To lead the company well, you need to know what is happening in the company and in its environment. Here are 5 essential agenda items for good governance in any organisation.
- Minutes and matters arising
You read the minutes of the previous meeting before this meeting. You are ready to report on your actions. You are ready to approve a future date for actions that were not completed. Pause there.
There are various reasons why an action may not have been completed. It may be that the timescale was unreasonable. Maybe an emergency moved the action lower in a list of priorities. Perhaps the department is short-staffed. Information might have become available which makes the original decision a poor one. It’s possible that the designated actioner didn’t agree with the decision in the first place. Find out what the reason was.
If actions are repeatedly missed, you can ask the company secretary to keep the original date of the action on the minutes. That way you can look into why an action repeatedly remains incomplete and you can address it.
2. Accounts
Every year you approve the statutory accounts before they are filed. You know whether the company is making profits or losses and the balance sheet does not ring any alarm bells. Great!
It is important that you also make sure the can pay those it owes money to on time? If not, it is insolvent and you might just find yourself footing the bill for your decisions. Make sure the company can get finance or defer payments so that it can pay what it owes when it owes it. If there is an issue, you need to know about and find a solution.
You might also wonder whether there is cash sitting in the bank that could be used in a better way. Or whether the debt-to-equity ratio is at the best level for the stage of growth.
3. Operations
You will, of course, want to know how the company is doing in its general activities, whatever it is that it does. There is some overlap between reporting on financial projections and operational projections, but these don’t need to be repeated. The important thing is that you have the information that you need to monitor the company’s activities and how it is performing against the agreed strategy and react to changes. You might have used some techniques in your strategic planning, and you can apply them again at any point
4. Compliance
Compliance is not terribly exciting. But it is necessary. It is necessary, for you and for the company. You are personally responsible for making sure the organisation takes steps to prevent it from being used to defraud, launder money, finance terrorism, benefit slavers, create an excessive risk to health and safety, and generally create a nuisance to society. Exactly what (and how) you need to monitor, depends on what the company does. Either a compliance professional or the company secretary can advise you on what your obligations are in your industry and what reporting, policies and procedures you need (and want) to have in place.
5. What do you think should be added to this list?
This is the single most important item on this list. You are responsible for leading the company, so what do you think the board should be talking about?
What would you add? Artificial intelligence? Climate change? Nvidia share price? Company culture? Employee retention? Namibia elections? Space exploration?
What topic might it be useful for you and the other board members to explore to better support your company’s future successes?