Good governance

Governance refers to the structure of customs, processes, policies, practices, and rules that affect how people manage a business. Good governance practices can help small businesses meet their strategic objectives, mitigate risks and create long-term value for shareholders and other stakeholders.

Advantages of good governance

Governance is an integral part of ESG (Environmental, Social, Governance) and an important aspect of sustainability. It is integrated in many ESG frameworks, such as the Global Reporting Initiative (GRI) and the Corporate Sustainabiility Reporting Directive (CSRD). Provided it is done practically, it allows for several reasons:

1. Builds trust with stakeholders and protects your business

Think of governance like a report card for how well your business is managed. By making governance assessments, you show your customers, yourself and your employees that you take running your business seriously. When people trust that you're doing things right, they're more likely to support your business. But good governance isn't just about following rules; it's also about spotting problems before they become significant, providing a safety net for your business's future. Regularly assessing your governance practices can catch things like financial mismanagement or ESG problems early on.

2. Helps with the bank

Strong governance can make all the difference if you're looking for a loan or another form of finance. Banks want to see that you're managing your business well and taking steps to minimise risks. Incorporating governance and objective ESG assessments makes your business more attractive to banks that must start reporting this year.

3. Improves Decision-Making

Governance assessments aren't just about checking boxes; they're also about making sure you're making smart decisions for your business. Evaluating your board structure, risk management processes, and ethical standards can help you identify areas for improvement. This leads to more intelligent, more informed decision-making across your organisation.

4. Boosts Reputation and makes you future-proof

In today's world, reputation is everything. Customers want to support businesses that they trust and respect. By showing your commitment to good governance and sustainability, you show the world that you're a responsible business owner who cares about more than just making a profit. Running a business isn't just about the here and now; it's also about planning for the future. As sustainability becomes increasingly important, companies that embrace future-fit practices will be better positioned to adapt and thrive in a rapidly changing environment, instilling a sense of optimism and forward-thinking in your business strategy.

5. Enhances Resilience

Sustainable businesses are often more resilient in economic, environmental, and social challenges. By integrating governance with a focus on sustainability, you can control risks associated with climate change, supply chain disruptions, and other external factors. This helps your SME adapt and thrive in an uncertain world, ensuring long-term success and viability.

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Incorporating future-fit and sustainable business considerations into governance is sensible. By doing so, you can future-proof your business, drive sustainable growth and meet stakeholder expectations. We are happy to guide and support you with this challenge.