Jeremy Canning, Pro-actions

1. SME Board Meetings &
Governance
November 2020

2. © Pro-actions Business Coaching and Support Limited 2020
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Welcome and housekeeping
Questions very welcome – please use the keyboard ‘chat’
function or the virtual ‘raise a hand’ as we go and we’ll keep an
eye out for them.
All mics should be on mute automatically but please make sure
they stay that way, as we have quite a number joining and
background noise might otherwise be a problem!
The final slide has contact details if you want to chat anything
through with us off line afterwards
There’s a quick poll at the end for feedback and to confirm
details for those that would like a copy of the slides. Please give
us answers to all seven questions (remember to scroll down!)

3. © Pro-actions Business Coaching and Support Limited 2020
We have looked at business this way for over a decade…many
aspects of this paradigm are in play more so since Covid 19 arrived!
Strengths, pain points,
issues and development
areas
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Diagnostic
What you want and
need from your business
Goals and Strategy
Running your business
rather than your
business running you
Governance
Helping with specific priority pain points and issues
Hands on support and Projects

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What we will cover today
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What we mean by governance
Governance and company growth
Getting the Governance basics implemented
Why bother worrying about it in an SME
Managerial grip

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A quick poll…
Who currently undertakes
monthly senior management
or board meeting?

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What do we mean by governance?
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Who gets to tell
the organisation
what to do?
How do you get
the organisation
to do what it’s
told?
How do you
know the
organisation has
done what it
was told?

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Why governance matters: the principal/agent problem of
misaligned incentives
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Be Do Have
Principle – you doing business for yourself
Agent – employees doing things for your business
Be Do Have
Alignment of interests
Be Do Have
Alignment of interests

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Put another way: as owner manager you’re in the vice whilst
employees get to go home at 5.
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Some examples where differing interests cause incentive malalignment
Owner Employee
Dividend flow entirely dependent
on results
Salaries and bonuses not
proportional to results
Expenses directly impact bottom
line and personal worth / lifestyle
It’s not my money – I just need to
get the job done
It has to be done to keep the
wheels on the bus
It’s not my job / I’m not paid to do
that
I have to work until the job’s done I’m paid to do 35 hours a week
Exaggerated to make the point – not trying to suggest all
employees are lazy rip off artists!
However as water will flow downhill people will follow
incentives
Governance is the system which enables you to align agent
incentives with principle desires

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As the business grows, governance evolves and becomes
more and more important. Who oversees (O), manages (M)
and does (D)?
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Sole
Trader
Micro Small Medium Large
Owner
Manager
Employee
O M D O M D O M D O M D O M D
O M D O M D O M D O M D O M D
O M D O M D O M D O M D O M D
Transition zone from owner manager being the glue in everything to
having to delegate – and therefore needing increasing governance

10. © Pro-actions Business Coaching and Support Limited 2020
Governance grows and builds with the organisation. But the
building blocks are the same and need to go in right at the start
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Small
Owner Oversees, Manages
and Does it all
Small/Med
Owner Oversees and
Manages some
Med/Large Public Listed
Hired managers manage
Centralised command and
control – owner tells
Centralised control but
increasingly delegated
authority
Accountability to public
shareholders – board tells on
behalf of the shareholders
• Business plans, budgets,
forecasts
• Management accounts
• Operational performance
monitoring and indicators
• Structure for reviewing
performance and using
the results to determine
actions (= board meetings)
• Ensuring basic managerial
follow up (= minutes and
actions trackers)
• Formalised lines of control
and spans of authority
• Incentive structures
• Documented responsibility
limits
• Enforcing policy (board) vs
tactics (management)
• Board holding
management to account
for results
• Implementing ways of
making sure that what is
reported is true
• Reporting externally to the
shareholders
• Listing rules
• Corporate governance
code
• Board and committees
formal governance – ie
Audit/Examination,
RemCom, Nom Com, Risk
etc)

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Getting it right from the start – things to get in place now
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• Business plans, budgets,
forecasts
• Management accounts
• Operational performance
monitoring and indicators
• Structure for reviewing
performance and using
the results to determine
actions (= board meetings)
• Ensuring basic managerial
follow up (= minutes and
actions trackers)
• Formalised lines of control
and spans of authority
• Incentive structures
• Documented responsibility
limits
• Enforcing policy (board) vs
tactics (management)
• Board holding
management to account
for results
• Implementing ways of
making sure that what is
reported is true
Small
Owner Oversees, Manages
and Does it all
Small/Med
Owner Oversees and
Manages some
Three steps to get the mission critical bits into place…

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Step 1: Get your board meetings set up and working
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These set the cadence and force you to work ‘ON’ the business not just
‘IN’ the business
Work out who should be on the board (ie statutory directors), and who
should be in attendance (not a member and no decision making
authority, but contributes to information and discussion). Get external
perspective to hold you to account
Get the dates booked in for the next 12 months. 1 per month
Work out the agenda items in advance
Drop us a line for our free template to
help with this
Governance is important but not necessarily urgent – board
meetings help keep it regular and urgent enough to actually get
done. Without them the risk is that the rest never happens…
Run properly disciplined meetings with minutes and actions – get help
chairing if needed

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Step 2: Get your business plan, budget, KPIs and management
accounts sorted so they can be formally adopted and then
reviewed monthly by the board
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Then you can manage the business by the numbers rather than
gut and guess work
Business plans – ask us about templates or join our SME MBA
which takes you right the way through how to do a proper job
Financial Modelling and KPIs – get on our free ‘build your
budget and KPIs’ webinar.
Management accounts – get your chart of accounts properly
sorted so that they actually tell you something useful
Monthly review – get external perspective to ensure that
things get studied properly and the awkward questions get
asked

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Step 3: Get clear about who is supposed to be doing what – ie the
organisation structure, and roles/responsibilities
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Getting clear understanding about who does what – and
making sure the owner/manager isn’t the glue in everything
Organisation structure – who reports to who. See our free
webinar on Organisation Structure and People Management
Who is responsible for what and do they understand it – Job
descriptions, objectives and performance appraisals
Leadership – don’t forget people need to understand how
they are important to the bigger picture and the ‘why’

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Managerial grip: enables getting the right stuff done well and
quickly.
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“To me, ideas are worth nothing unless executed. They are just
a multiplier. Execution is worth millions”
Steve Jobs
Ideas? We’ve had ’em
Since Eve mated Adam,
But take it from me
Execution’s the key.
Felix Dennis

16. © Pro-actions Business Coaching and Support Limited 2020
Managerial grip defined
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The ability to ensure that:
• Decisions are made in a timely manner and
communicated.
• Actions resulting from those decisions are
appropriately allocated.
• There is systematic follow up to ensure that those
actions are completed in a timely manner.
Otherwise known as the ability to get sh!t done!

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Getting decisions made and followed up in a timely manner
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The ‘how’ of this depends on your business and the nature of the decision – however it
should flow down from your board meetings, via management, to everyone
Board
- Policy, strategy, financial decisions
Management Team
- Decisions about how to execute what
the board decides
Staff (includes managers)
- Getting it actually done
Set your regular board
meetings (ie monthly) so
there is a cadence to
plan/do/review/decide
Set your regular
management team
meetings (ie weekly) to
plan/do/review/decide
Regular 1:1s to prioritise
workload and delegate
actions

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Using meetings to get stuff done
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Use the cadence of the meetings as deadlines for completing
actions and reviewing
Board meetings need proper minutes (which contain actions that
should be checked as part of ‘Matters Arising’)
Management meetings should have an action tracker that’s
reviewed as part of every meeting
Watch out for ‘Submarining’. Actions get agreed at meeting 1, nothing
happens until everyone panics just before meeting 2 so they don’t look
bad for not having done their actions! Shorter, more regular meetings…

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An example meeting actions tracker – let us know if you’d like a
copy to get you going
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Mainly for board and management meetings, but works just as
well for any other regular meeting
Specific Team meetings
Sales meetings

20. © Pro-actions Business Coaching and Support Limited 2020
The famous five for getting stuff done out of meetings
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All regular meetings should have central actions trackers1
Anyone who turns up to a meeting without a notebook to capture their
own actions should be sent home. Or bludgeoned with the health and
safety manual.
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Set deadline dates for every action – and mean it.3
Don’t set people up to fail – too many unprioritized actions or
unachievable dates starts to make it acceptable not to deliver
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Delegate – too many actions on the MD who can’t do it all starts a
culture of if being OK not to deliver on time.
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“A king, realizing his incompetence, can
either delegate or abdicate his duties……”
Delegation for the nation… Key to using the bandwidth around
you, but useless without managerial grip to support and follow up
Marlene Dietrich
Delegate Abdicate
It’s the MD’s job to LEAD not necessarily to DO
Delegate, empower, trust. But FOLLOW IT UP to support /
correct / educate / make sure it happens
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22. © Pro-actions Business Coaching and Support Limited 2020
2 types of Controls
Your controls are a key part of following up your delegation –
they help close the feedback loop
Controls
Business systems and processes which are designed
to protect your company from errors or mistakes that
would otherwise damage it.
They give you assurance that the right things are being done
and especially that the financial statements are correct.
Re-active
Pro-active
Lets you see that something is not right.
A few examples: Reports, KPIs, variance analyses (vs
budgets, forecasts, benchmarks, SLAs etc), RAG statuses,
aged debtors, performance appraisals
Stops people doing the wrong things in the first place
A few examples: Standard operating procedures,
standardised documents, checklists, maker vs checker, dual
signatories, peer reviews, approval limits, approval
frameworks (eg against budget and within specific cost
codes etc), credit control policies.
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23. © Pro-actions Business Coaching and Support Limited 2020
Some example re-active controls that help maintain managerial
grip on the business
Getting direction clear
Sales Budget
Expenses Budget
Marketing plan
Sales plan
Operations plan
Cash flow projections
P&L and BS projections
Staff JDs and objectives
Regular management accounts
Trend and variance analyses
Re-forecasting Cash flow + P&L
Aged debtor analyses
Supplier concentration review
Customer concentration review
Customer complaints analysis
Staff performance reviews
Making sure it happened / gets
done and the results are right
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Actions trackersBoard / Mgt meetings

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Moracle and Pro-actions are here to help if you would like to
talk or get some further advice.
Drop me an email to chat about potential next steps.
jeremy.canning@pro-actions.com
07 884 549 884
Any further information or to contact me …
If you would like a copy of today’s slides please email me or
contact Moracle