Business Governance may be defined as the framework of rules, relationships, systems and processes within an organisation and by which authority is exercised and controlled. It encompasses the mechanisms by which that entity and those in control are held to account.

To successfully carry out the responsibilities of overseeing organisational performance and compliance, the proprietors must put in place a system to direct and control (or govern) the organisation.  There are also key relationships between owners or shareholders, directors and management by which the organisation is directed and controlled. Governance is also therefore a process by which the organisation is responsive to stakeholders.

Peter is a graduate of the Australian Institute of Company Directors, and is able to advise your business on both internal and external governance issues.

The appropriate Corporate Governance structure for your business will depend on a number of issues such as organisational size, ownership structure, history, the “control” structure – especially with a dominant owner or CEO, and the particular industry in which you operate.

We can also help identify the culture and values of all persons of influence or control in the organisation. We will also examine the balance that may or may not have been achieved between economic and social goals.

We will help each organisation identify and document the key elements of the corporate governance environment:

  1. Company and Statute Law eg ASIC, APRA, ASX, ATO and ACCC
  2. Regulatory bodies specific to your business.
    Government’s role of minimum standards of corporate behaviour; conflicts of interest and possible attention to ensure fit and proper persons
  3. Shareholders/ owners Shareholder interest in company performance; investor relations; media relations; remuneration issues; board turnover; fraud; and many other ownership issues
  4. Society expectations e.g. reporting; triple bottom line; the Balanced Score Card approach; web site content; accuracy of feedback to stakeholders; customer expectations including issues such as sweatshop labour, price fixing and genetically modified food; competent, motivated employees; moving parts of operations offshore, coal seam gas extraction; pollution in general; creditors and credit ratings; audit independence; the influence of lobbyists, etc
  5. Self-regulatory codes. Many organisations have introduced codes of ethics and conduct.  The Australian Institute of Company Directors (AICD) and Governance Institute of Australia expects every member to comply with a code of conduct including:
  • Acting honestly, in good faith and in the best interests of the company
  • Having a duty of care and practising diligence in carrying out the functions of office and its powers
  • Using the powers of office for proper purpose
  • The responsibility to the company but also to all stakeholders
  • No improper use of information
  • Not taking improper advantage of a Board position
  • Properly managing conflict with the interests of the company
  • Being independent in judgement
  • Confidential information to be the property of the company
  • No conduct that would bring discredit to the company
  • Obligation to comply with the spirit as well as the letter of the law

We would examine if the owners or directors are acting in accordance with the above points including for example determining if there has been an imbalance between the need for short term performance with the requisites of long term value creation, risk management, the value of strong processes and internal controls and a shared value system.

There is no universal formula for good business governance however, given the above, we can recommend the effective internal and external governance requirements for a business with the aim of providing effective and practical steps to improve the overall quality and effectiveness of governance in your business. This may also include advice on the structure of the Board, the benefits of reporting timely and balanced disclosures, documentation of risks and procedures to mitigate them and fair and responsible remuneration.