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    CG and Growing Business

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    Frandy Karundeng
    The document discusses how company governance structures evolve as businesses grow from small family operations into larger complex entities. Initially, a single owner-manager makes all decisions but as the business expands, they must delegate responsibilities to others and establish a formal board structure. As the company grows even larger, non-executive directors are recruited for independent advice and the governance structures continue adapting to the changing needs of the evolving business.

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    CG and Growing Business

    Uploaded by

    Frandy Karundeng
    16 views8 pages
    The document discusses how company governance structures evolve as businesses grow from small family operations into larger complex entities. Initially, a single owner-manager makes all decisions but as the business expands, they must delegate responsibilities to others and establish a formal board structure. As the company grows even larger, non-executive directors are recruited for independent advice and the governance structures continue adapting to the changing needs of the evolving business.

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    The document discusses how company governance structures evolve as businesses grow from small family operations into larger complex entities. Initially, a single owner-manager makes all decisions but as the business expands, they must delegate responsibilities to others and establish a formal board structure. As the company grows even larger, non-executive directors are recruited for independent advice and the governance structures continue adapting to the changing needs of the evolving business.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    16 views8 pages

    CG and Growing Business

    Uploaded by

    Frandy Karundeng
    The document discusses how company governance structures evolve as businesses grow from small family operations into larger complex entities. Initially, a single owner-manager makes all decisions but as the business expands, they must delegate responsibilities to others and establish a formal board structure. As the company grows even larger, non-executive directors are recruited for independent advice and the governance structures continue adapting to the changing needs of the evolving business.

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    © All Rights Reserved
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    CG &

    GROWING
    BUSINESS

    ASM ,.ES ,gnednuraK ydnarF


    The Growth of
    The Company is an
    EVOLUTIONARY Process

    many never grow much


    beyond the initial founding
    stages and remain as small
    family businesses,

    but those which do grow may


    do so in steps >>>>
    Initially the small company has
    simple structures and procedures
    dominated by the owner-managers
    GNIWORG NI GC
    who take all the decisions.
    SSENISUB

    The larger and more complex the


    entity grows, the more difficult it is
    for the solo entrepreneur to keep
    track of everything so they have to
    begin delegating powers and
    responsibility to others who may not
    be family members.

    These individuals have to have real


    authority to be effective so are
    appointed as directors, thus there
    has to be a formal board structure.
    GNIWORG NI GC

    As the company grows, the need for


    more independent advice becomes
    SSENISUB

    apparent and so non-executive


    directors start to be recruited.

    And so the company evolves, and the


    governance structures with it.
    ADOPTION OF KEY
    PRINCIPLES OF GCG

    Delegation of Institution of a Professional Accountability


    authority away system of checks decision-making based on defined
    from one and balances so based on reliable levels of
    individual who no one person information responsibility
    is controlling has unfettered supplied
    shareholder, control to a properly Transparency
    director and constituted and regarding the
    manager empowered firm’s activities, to
    board encourage high
    standards of
    behaviour.
    The development of effective
    governance processes may:

    lift a significant facilitate a swift allow access to a wider


    pool of expertise and
    burden from the succession
    know-how
    founder

    The result may be improved leadership, decision making


    and strategic vision. Improved governance may also make it
    easier to monitor and manage the various risks to which the
    company is exposed, particularly as it grows in size and
    complexity.
    Governance will become an
    increasing issue for unlisted

    GOVERNANCE companies as they develop new


    sources of finance.

    & FINANCE Initially, the primary source of funds


    is likely to be retained earnings or
    financing from internal networks, eg
    families or associated corporate
    groups.

    However, unlisted companies may


    also turn to banks, venture capitalists
    and private equity investors in order
    to finance their expansion and
    growth.

    A greater reliance on such external


    sources of finance will necessitate
    the implementation of a more
    explicit governance framework, as
    external financiers seek assurance
    that their investments will be well
    managed.
    HAVE A JOYFUL DAY

    Thank you!

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