Good governance is crucial for start-ups, just as it is for big corporations and businesses of all sizes. Founders of startups must make sure governance is a priority from the start or they run the risk of stunting growth and creating problems down the line.

Why Does Good Governance Matter?

As the business bible, governance encompasses all the vital details of the company – how you want to run your business, how decisions will be made, what the processes are, how risks will be managed, and how staff will be protected from any possible legal action. It sets the standard for everyone in the company and explains what everyone’s role is, how they should work and what the business wants to achieve.

Ultimately, governance is how you want to run your business. By investing time in it right at the start of founding your company, you will not only gain a far greater understanding of what it is you want to achieve but you will enable others to believe in and grow with your company.

By providing the processes and installing supportive measures, you create a reassuring and healthy culture. People will want to work for your start-up and be a part of it, and investors will want to invest in it, giving you the means to grow the business and sustain the growth as you’ll be able to attract good staff in the future too.

As the founder, you set the standard and you need to live by those standards and lead by example – or you’ll create a toxic culture. This would massively set your start-up back and could even lead to business failure.

Startups Need Good Governance From The Off

There are a few simple steps you can take to make sure you get governance right, from the outset of starting up.

Plan and prepare for the culture you want – you decide what your business will be like and how it will operate. By knowing what your company stands for, where it is going, and what the challenges are on the way to achieving your goals, you encourage the good behaviour of employees needed to grow the business. A healthy culture means the happy staff feel appreciated and perform well for the benefit of the company.

Have policies and processes in place so people understand their role and what is expected of them. With support, staff will engage with their duties and feel empowered, working to the best of their abilities.

As a founder, it’s important you lead well and build a strong leadership team of experienced and ethical individuals that work well together. If the leaders set a good example of how to perform in the business, this will influence the entire organisation.

Be transparent from day one and explain your reasons for every significant decision so that staff and investors alike know they can trust you and that you have their best interests at heart. Always share key updates and keep communication channels open so staff feel appreciated and listened to.

As well as getting governance right from the beginning, you need to maintain it for the future to ensure the culture stays healthy and the business continues to operate efficiently. Maintenance is far easier and less time-consuming than trying to implement good governance when the company is bigger so take heart from future-proofing your business as a start-up and supporting it from day one to enable growth and development into a successful company.