What Does Governance Even Mean?

One of the most common misconceptions I hear from business owners is that 'governance is only for big companies.'

In reality, governance is not about ticking boxes or satisfying compliance. It's about building stronger businesses that last. In the SMBs I work with — especially those in growth mode — good governance is often the turning point between chaotic management and confident scaling. 

Why Governance Matters   

Governance sets the tone at the top. It shapes decision-making, defines accountability, and reduces the risks that can derail progress. According to the Institute of Directors New Zealand, good governance helps businesses create long-term value, manage risk effectively, and stay strategically aligned. And I have to say that pretty much sums up what drives good businesses (& picking the CE if one of the Directors in not MD).

I’ve seen this first-hand:

• One business introduced monthly advisory board meetings with me as independent chair. Within a year, they doubled their gross margin.
• Another I work with created space to think beyond day-to-day operations — it led to open discussions about succession and ultimately helped bring a new shareholder into the business with clarity and confidence.     

Now I’m not taking the credit for these improvements – that sits with the business owners themselves. My job is to help steer the direction and keep them on track 

What Governance Looks Like

Governance in an SMB doesn’t necessarily mean an 80-page board pack or formal subcommittees. It means clarity and consistency.

Here’s What I See Working Best:

• Regular board meetings (monthly or bi-monthly) with structured agendas.
• Clear distinction between board and management roles (but understanding there is cross over for SMBs at time).
• Strategy & risk led conversations, not just operational reporting.
• Performance metrics that drive behaviour.
• A mix of perspectives.

Where It Goes Wrong

Too often, governance becomes a formality — or worse, a drain on time. Red flags include:

• Board meetings that rehash operational detail.
• No clear actions or accountability after meetings.
• Strategy only discussed at annual planning sessions.
• Directors who never challenge or question decisions.
• Directors who want to dominate everyone.

The best businesses I work with create space to think, not just report. They know the value isn’t in the minutes, it’s in the mindset and having a shared direction of travel. 

How to Strengthen Your Governance

Start with these practical shifts:

• Start each meeting with a strategic discussion – where are the opportunities and risks.
• Come prepared – read any information, previous minutes, financials.
• Bring in an independent advisor or chair to challenge thinking.   

The moment a board shifts from 'oversight' to 'insight' is when it starts adding real value.   

Questions to Ask Yourself

Are we having enough future-focused conversations in the boardroom? Does our board structure still suit our current size and stage of growth?   

Things You Can Do Now

1. Share this article with your board / SLT and ask, 'What do we want governance to look like?'
2. Start each meeting to focus on strategy — no reports, no updates.