Directors You Need to Monitor Trends
CORPORATE GOVERNANCE NEWS: Issue 5 of 7
Hello, I’m Peter Towers, Managing Director of ESS Small Business and ESS BIZTOOLS. Welcome to Empowering SMEs.
Directors and committee members determine policies for companies and not-for-profits, charities or sporting organisations. A key role of the board or the committee is then to determine the type of skills that the chief executive officer, general manager, manager or whatever you want to call that person, will need to be able to deliver the types of results for which your board/committee is looking.
You would then advertise and employ a suitable person. That person’s role is to implement the board’s policies. However, directors cannot wash their hands of this process at that stage. Directors and committee members need to have implemented appropriate procedures so you’re able to monitor the trends and monitor what is happening within the organisation; throughout the year – not at the end of the year, but throughout the year so you’re able to determine whether the policies that the board/committee has signed off on are being appropriately implemented.
You need to diligently monitor activities such as:
- Is the organisation growing in line with the board’s expectations?
- Are you increasing market share?
- Are the future markets identified within the activities that the management team is undertaking?
- Are the marketing strategies, implemented by management, achieving the desired results?
- How are the sales in the business going?
- Are the sales budgets being achieved?
- Is there an appropriate “mix” of customers? It can be dangerous to have any one customer comprising more than 20% of your overall revenue. I know in some instances this is very difficult to avoid, but boards need to be very much aware of the percentage of overall sales that the largest customers have.
- Is there a differentiation of products so there are new types of products or services continually available for your customers?
- Is research and development being undertaken within the organisation to assist the organisation to have new products/services in the future?
- Are there appropriate policies to protect the brand of the company or organisation?
- Are the customers happy? What do the customer surveys and customer feedback forms indicate?
- Is the board of directors or committee being kept informed of what customers have to say?
- What about the frequency of sales and average sales figures. Has there been any changes? Of considerable concern, of course, will be if these figures start to reduce and directors/committee members need to be asking questions and analysing the information so remedial action can be taken.
- Are the “people management strategies”, that the board has signed off on, been appropriately implemented? Are they working?
- Is the board receiving regular reports on resignations, absenteeism, injuries, dismissals and any problems with Fair Work Australia?
- Are line managers within the organisation receiving financial data that they understand; that they can interpret?
- Are the line managers receiving appropriate key performance indicators or benchmarking reports that assist them to undertake their duties?
- Are budgets and cashflow forecasts being updated?
- Are the debtors’ systems being appropriately maintained?
- What is the debtors’ days outstanding? Has it varied from what was established the previous year? How is it performing against the target?
- How are legal matters being monitored in the organisation and is the board being kept informed?
- Are there any disputes with the Australian Taxation Office?
- Are payments being made at the appropriate time to the Australian Taxation Office and for superannuation contributions?
If you are going to adequately perform your duties as a director or a committee member, these are some of the trends that directors and committee members of organisations need to monitor.
The Corporate Governance Network, which we’re commencing shortly, will be delivered by six 90-minute webinars/workshops over the next twelve months. The presenters in these webinars/workshops are experts in their individual fields, whether it’s:
- Workplace Health & Safety
- People Management
- Fair Work Australia issues
- Cashflow Forecast
- Corporate Governance Boards of Directors’ Meetings
These webinars/workshops will help you obtain a fair better appreciation of your role as a company director, officer of a small/medium enterprise company or a committee member or officer of a not-for-profit, charity or sporting organisation.
The first webinar/workshop is being presented on 9th May 2018. We are re-running that webinar/workshop on the 29th May 2018 because we know that some people’s diaries are already booked out for around the 9th May 2018. If you’d like to obtain more information, please go to www.esssmallbusiness.com.au and review a range of procedures relative to performing company directors’ duties.
If you have any questions, please do not hesitate to contact Peter Towers - Email: firstname.lastname@example.org or phone 1800 232 088. The team at ESS Small Business look forward to hearing from you.
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Episode 005 - Directors You Need to Monitor Trends
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