Recent research from USwitch revealed that 78% of SME owners work during annual leave. This outlines the resource constraints placed on individuals running small businesses, who frequently have to focus on immediate goals at the expense of vital tasks that will secure their long-term future

According to Ciaran Bollard, CEO of the Corporate Governance Institute, founders at the helm of startups should consider how they can leverage external support to meet the extensive demands that accompany growing a business.

Bollard said: “SMEs are tasked with tackling compliance challenges while balancing this with the day-to-day management of their business. Ensuring that they are successful on both fronts requires considerable effort and attention, including the diversion of resources that business owners cannot often afford to spare.

“The current regulatory landscape dictates that governance is a key focus for companies of any size. Despite the EU’s proposal to delay the Corporate Sustainability Reporting Directive (CSRD), this legislation is still in the pipeline, business decision-makers simply have more time to prepare. It’s crucial that SME owners use this time to align priorities and complete the work that is needed to adhere to the new regulations.

“Wherever possible, SMEs should look to put a board in place to enhance expertise and share a proportion of the workload. A board helps create a structure around greater accountability, responsibility and succession planning for the executive team. Even if they are only operating in an advisory capacity, boards can build resilience to withstand external shocks, for instance the recent tariff storm, and improve visibility and awareness of the company.

“Thinking strategically and challenging the conventional order of things can be vital for founders who are knee-deep in the everyday running of their business. It’s important to assess if things can be done differently to free up time, which can then be spent on governance and planning the organisation’s long-term future.

“SMEs that fail to comply with regulations can face penalties in the form of fines or suspensions, while simultaneously having to deal with any reputational damage. Areas including funding and partnerships will be at risk of disruption following a breach of any kind, which is why decision-makers must prioritise governance and avoid tunnel vision on other areas of business activity.

“The responsibility should not fall on SMEs alone. Governments, enterprise agencies, trade bodies, and larger corporates all have a shared duty to support SMEs on their governance journey. These institutions should come together to consider how they can streamline compliance measures for smaller businesses and guide business leaders to better understand the requirements of watertight governance.”

Bollard concluded: “Governance isn’t static. As your business evolves, so do your risks. SMEs should regularly assess their exposure to financial, legal, operational, and reputational risks. A proactive approach helps identify blind spots early and ensures governance frameworks remain relevant.”

For more startup news, check out the other articles on the website, and subscribe to the magazine for free. Listen to The Cereal Entrepreneur podcast for more interviews with entrepreneurs and big-hitters in the startup ecosystem.