The Buck Finishes Here
CORPORATE GOVERNANCE NEWS: Issue 6 of 7
Hello, I’m Peter Towers, Managing Director of ESS Small Business and ESS BIZTOOLS. Welcome to Empowering SMEs.
Revelations from the Banking Royal Commission have highlighted that directors have a responsibility to:
- develop policies and strategies for their company; and
- make sufficient enquiries to satisfy themselves that management and the team have appropriately implemented systems to ensure that the policies and strategies signed off by the directors are working efficiently.
This means that directors and committee members must ask sufficient questions and make appropriate enquiries to ensure that the systems, that have been implemented, are identifying any deviations from the policies authorised by the board of directors or committee of an organisation.
Committee members of not-for-profits and charitable organisations need to make sufficient enquiries, obtain certification from reputable third parties and undertake physical inspections to ensure that assets exist – so that the committee members are not embarrassed and suffer financial penalties as occurred to the committee of the National Safety Council of Australia Victorian division in 1991 when assets, that the organisation claimed existed e.g. debtors and “rescue equipment in sealed containers”, were found not to exist.
The organisation had significant borrowings which were secured on those “assets” which were found not to exist, even though the committee had signed off on financial accounts for a number of years indicating that those assets did exist.
There was also an allegation that the audited financial accounts had been interfered with prior to the accounts being submitted to the committee.
This particular case, which was one of the highest frauds ever committed in Australia, highlights the necessity for committees to be very diligent in dealing with the CEO of their organisation.
The recent problems confronting the “cheating allegations” against the Australian cricket team whilst playing in South Africa, have highlighted the necessity for sporting organisations to ensure that the “culture” of the organisation, as espoused by the board or committee, is actually implemented by the players and team officials – otherwise the organisation can suffer significant penalties through public criticism, supporter turn off and loss of sponsorship which affects the entire organisation, not just the elite playing group.
Directors and committee members need to be continually aware that one of their key responsibilities is to ensure that the board of directors/management committee policies are being appropriately implemented.
The Corporate Governance Network which ESS Small Business has developed is being presented from Tuesday, 29th May 2018. The Corporate Governance Network will explore a wide range of practical issues which might confront directors of SME companies and committee members of not-for-profits, charities and sporting organisations.
Presentations in the workshop/webinars will be made by people with significant expertise in:
- director responsibilities
- company secretary duties
- people management/Fair Work Australia issues
- Workplace Health and Safety
- debtors’ management and collection
- budgets and cashflow forecasts
- financial accounts
You are invited to attend a Free Preview Webinar of the Corporate Governance Network on Tuesday, 22nd May 2018 at 12-noon. To register to attend please click here.
Other articles relative to the creation of the Corporate Governance Network to assist directors of SME companies, committee members of not-for-profits, charities and sporting organisations are:
- Corporate Governance Network (Click Here)
- Awareness of Legislation for Directors and Committee Members (Click Here)
- All Things Financial (Click Here)
- People Issues for Directors and Committee Members (Click Here)
- Directors you need to Monitor Trends (Click Here)
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.
Have a great day!
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Episode 006 - The Buck Finishes Here
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