Life as a CEO is undeniably tough thanks to the endless combination of board meetings, employee demands, colleague disagreements, suppliers wanting policy updates, investors wanting to know how their money is performing, a lack of accountability among staff and the ever-present fear of being taken to court.
CEOs shouldn’t have to tackle so many issues all the time and need to find a way to lead without the constant headaches and sleep-deprived nights. So how can CEOs manage all their demands and ensure their company is run efficiently? Governance is the key.
Governance is how you want the business to operate – this includes every aspect of the company and effectively creates the culture. Incorporating law, finance, compliance, strategy, HR, board management, stakeholder management and beyond, governance sets the standards for everyone involved in the company.
It tells people what their roles are and what’s expected of them, how the business and the staff are accountable. This sets the standard and leads to a supportive and productive environment, and to long-term business growth.
More and more people are starting to realise that the collapse of big companies impacts the economy and society, and the government introduced the Wates Principles in 2018, the first governance code for big privately owned firms.
Regardless of your business plans – whether for fast growth, significant hiring, or exiting a market – the level of governance your company has will determine how successful your plans are.
If your company has bad governance, things start to go wrong. Bad governance causes investors to become restless, staff to resign, managers to refuse to take ownership of their work, the culture to turn toxic and employees to no longer want to work in this environment. On top of all this, roles become unclear, and people make bad decisions that make the company perform badly and look bad to those inside and outside it.
It is down to the CEO of a business to set the level of governance and lead by example. By ensuring the company is run well, that this comes from the top, and staff are looked after, the business is far more likely to survive in the long term and be able to outperform its competitors.
Good governance causes investors to trust you, employees to want to work for you, and managers to take ownership of their work and make smart decisions that benefit the whole company. Staff feel motivated in their roles, and everyone knows exactly what is expected of them. With support, people feel accountable and perform well, enabling fast growth of the business.
Supported staff are happier staff, and if employees feel appreciated at work, they are less likely to experience burnout or to want to leave. This creates a healthier culture for the company and means the CEO can focus on long-term goals, as the operations are taken care of, and the daily business runs efficiently.
Furthermore, with good governance in place, CEOs can rest easy and sleep well, knowing they’re able to perform their role well and without any unnecessary distractions.