An article that will prompt you to think about vital corporate governance and risk management around the key people in your business.

1. A Christmas
Carol
Lessons for Good
Corporate Governance
by John Merrigan
understood the need for change to bring
meaning and purpose to his future life. In the
end, we understand how past events have
shaped us to be what we are in the present
and crucially, that we still have a choice to
decide how the future will be, based on how
we act.
So it is with corporate governance. The secret
of success is to make a realistic assessment
of where you are today, and then make
real changes to determine the future course
of the business and linked to that, your
personal life.
For the remainder of this piece, I want to talk
about PEOPLE and some choices SME
businesses must consider in 2014. Typically,
SMEs have an over-reliance on a relatively
small number of key employees for their
success. They are usually trusted, reliable and
aligned to the vision of the owners as a result
of years of collaboration. They often have a
key skillset, connections and vital experience.
And, most likely in recent years, they have
shown loyalty and personal sacrifice through
difficult times.
As we approach the end of 2013 and looking
forward to 2014, I am reminded of the lessons
we can reflect on from the wonderful book:
“A Christmas Carol”, by Charles Dickens.
The book centres on the life of Ebenezer
Scrooge who is portrayed as a mean, pennypinching character totally focused on money
and his work, with no family or friends. By a
twist of fate, he is visited by three ghosts who
are sent to redeem him: the ghosts of
Christmas Past, Present and Future. Dickens
takes us through a journey to understand how
Scrooge became what he is, and how he
Now, consider the future. Dubai has just been
awarded Expo 2020 which is an amazing
achievement and will bring great benefits to
the UAE, and potentially to your business.
There will be challenges too, specifically to
retain your key staff in the coming years.
Existing competitors and new market entrants
will move quickly to attract high performers,
and pay them better salaries and conditions.
How are you placed to deal with this very real
business risk? Retaining key employees and
putting in place processes to do this is at the
very heart of good corporate governance.
You are facing the future – past and present
solutions and behaviours will not be enough.
So, here are some suggestions to consider:
Share your future vision
Owners and senior managers must share their
vision of the business for the next 3 years with
key staff. You cannot expect people to follow
you if you do not tell them where you are
going. Write down the final vision on one
page, and share it with the key staff.

2. Define job roles and accountability
Sit with your key staff and work together to
define their job description and / or update
the older draft to make sure it properly
reflects reality. Unless this is done, key staff
will be frustrated and unclear what you
expect of them. Agree and jointly sign the
revised version.
Be consistent and transparent in
your decisions
Key employees need to see consistent
behaviours at senior management and owner
level. Take time to ensure you are being
consistent and transparent on your key
decisions and in how you act towards them. If
this requires personal change, take it slowly
and carefully.
Assess market rates
Succession Planning
The cost of living will likely increase as will the
family pressures on your employees. Don’t
rely on the past, and be realistic to accept that
things may well change by a higher order of
magnitude that you might like. A proactive
salary increase now is a wiser course than a
larger reactive increase when the key
employee comes to you with a competitor
offer letter.
As a contingency, identify potential successors
to replace key staff and where you will search
for them, both internally and externally.
Make the connections and give those junior
staff exposure to the roles of the key staff.
Being ready gives you peace of mind.
Implement a fit for purpose Performance
Management System (PMS)
Based on the company vision, job description
and the business plan, put in place a fit for
purpose PMS. At its simplest, this comprises
writing 5-10 company and personal objectives
for the next 12 months, and a formal progress
review at least twice during the year.
Consider profit share
Whilst many SME owners baulk at the
prospect
of
giving
key
employees
shareholdings, a sensible first step is a profitshare based on agreed performance metrics.
Make it objective and clear, commit to it, and
regularly update on progress with the key
selected staff.
Charles
Dickens’ book: “A Christmas
Carol” gives us valuable lessons on how
we need to change to be successful, based
on a sometimes painful assessment of
where we are now and how we got there.
It is a timely and timeless reminder about
key choices we face as we move into an
exciting 2014 and beyond. Unless you as
an SME owner make those future choices,
your key staff will make the choices for
you. Seek help and support from trusted
friends or external advisors if necessary.
It is a scary prospect, perhaps just like
being visited by a ghost, but there is real
opportunity for those who take this
governance challenge, carefully and with
real commitment.
Best wishes and good luck for 2014!!
Be visible and connected to your key staff
Make a commitment to spend extra time with
your key staff and to listen to them. Expand
conversations to sincerely understand more
about their personal challenges. Often, you
can do a lot without a lot of cost, and this
connection makes a huge long-term impact
and grows loyalty.
Copyright
johnm@tamayyaz.com
December 2013