Governance – Misunderstood by SMME’s – Carl Bates
Carl Bates is an entrepreneur focused on creating meaningful economic impact within the countries and economies in which he has the opportunity to participate. Considered a world-renowned resource on the education, appointment and guidance of high-performance boards, Carl is a sought-after keynote speaker and strategic advisor for a variety of companies and organisations. Through his leadership, the Sirdar Group has become Africa’s leader in this field.
Today he also makes use of the Contribution Compass, a leading-edge profiling methodology. Using this tool, Carl is able to guide board and teams in understanding their natural energy and area of maximum contribution, in order to maximise their performance and ultimately their rewards. The Contribution Compass is a rapidly growing business spreading the usage of this tool worldwide.
Carl Bates – Governance Speaker graduated with a Bachelor Business Studies First Class Honours Degree (Accountancy) and a Graduate Diploma in Business Studies (Finance) from Massey University, New Zealand. He was named a Massey Alumni and a Freemason Scholar and was awarded the Allan Gibson and New Zealand Institute of Chartered Accountants Wanganui Branch Scholarships. Carl is also a member of the New Zealand Institute of Chartered Accountants.
To many small and medium business owners, even the word ‘governance’ sounds scary and Victorian. However, despite popular opinion, the value the governance process adds to even the smallest of enterprises is fundamentally misunderstood.
Business owners often go into their particular business because they are passionate about it. They may know anything from a little to a lot about actually running a business, the particular industry they are entering and the roles that will be required. Among this group of business owners, governance is not a word used frequently. Nor is a formal governance structure a consideration for these companies. Generally, this is because the term governance is misunderstood – if indeed the SMME owner is even aware that it exists.
Having some kind of governance structure in a company is critical to the growth and development of any successful business. And while it can be scary and frightening thought for some, there is a clear and rational argument for doing it. Try and find a company that has achieved long-term growth, profitability and success that does not have a board of directors.
The companies that we deem as being successful, such as South African Breweries, Discovery and Vodacom all have an effective governance structure. So why is it that SMME’s do not provide themselves with the same opportunity?
Herein lies the problem. Governance isn’t simply for multi-national, multi-billion or even multi-million dollar companies. It is a key driver, a key tool and a key component of any business – be it a business with one employee to a company of a reasonable size. The role of the board is critical in any business that wants to have serious growth and take their business to a whole new level.
Yet there can be an element of threat felt by South African business people, when they look at sanctioning a board to begin to govern their own business – their baby! They often believe that they will be controlled, overruled and outvoted when it comes to operating the company that they started!
Yes, to a degree, this threat is real. The business owners will have to reflect on their achievements and mistakes, and report on them. They are likely to have to make some changes, and will have to listen to the advice of their board.
The problem is that SMME business owners see governance, corporate governance, as a concept that applies to just that – corporates! To consider that this might be relevant, appropriate and possibly even beneficial to their own company is quickly outweighed by the thought of the bureaucracy and significant cost that they think the governance process brings with it.
However, the reality of implementing enterprise governance, as I like to call it, in SMME’s can be quite the opposite.
The relevance of governance to an SMME becomes particularly important when it starts to transform from a craft to an enterprise. From a business about and driven by the owner, to an enterprise of its’ own.
While there may be some ambiguity about what governance actually means in the SMME sector, the results from choosing to grow and develop your business by implementing a governance structure are clear – and beneficial. If entrepreneurs and SMME owners like to think they are at the front of the business game, maybe it is about time that they caught up on this fact.
Carl Bates – Governance Speaker (BBS (Hons), GradDipBS, CA, MInstD) is the Founder and Managing Director of Sirdar Global Group, who have partnered with the Institute of Directors in the education and implementation of governance in the SMME sector in Southern Africa. As a global entrepreneur and speaker, Carl has a unique understanding of the role of governance in the SMME sector.
Carl Bates – Governance Speaker regularly addresses business seminars, industry conferences and universities on how to succeed in business and the use of enterprise governance in this process.