Corporate Governance & NFPs
16 October 2019
At Streeterlaw, we understand that you want your organisation, company or not for profit charity to be professional, proactive and successful. The right decision You
Ten Top Tips For Successful Directors
This article is not for “infotainment”, it is for Directors of Proprietary Limited Companies, Charities and Not-For-Profit organisations that want to be successful, organised and to truly understand their role, whilst ensuring to mitigate any personal liability that may arise due to their failure to act, their conduct or actions as a Director or officer.
As a Director, there is no time to waste. Roll up your sleeves and act now. Here is how.
1:
The Right Mindset
When making any decision as a Director of a company – the important question that you should be asking yourself is: Are my actions and the decisions I am making, in the best interests of the company as a whole?
You are not to act for yourself, for another, or a stakeholder – if you are you may be in breach of your statutory and fiduciary duties, which are explained below.
2:
Corporate Governance
Having the right mindset as a Director means you are prepared to invest in the organisation’s processes and that you are constantly thinking about how to improve internal corporate governance structures to achieve the goals of your organisation.
Our proactive clients are always considering ways of improving or enhancing decision-making processes.
At Streeterlaw we can create a personalised plan or framework for each process or solution you require to assist you to confidently fulfil your duties as a Director of a company
3:
Reduce Aged Debtors
If your aged debtors are more than 90 days+, heed the warning sign. This is a flag that there may be cash flow issues which may in turn restrict your company’s solvency.
If this is an issue, contact our office to discuss the best way forward to resolve commercial, contractual or debt recovery issues so that you can fulfil your obligations as a Director of a company.
4:
PPSA Secured Interests
PPSA – if you do not know what the PPSA is, you may be missing out on the opportunity to either register a secured charge over goods, supplies or loan monies which will put you steps ahead of unsecured creditors in the event the your company requires an external administration or becomes insolvency.
It does not cost much to do, but it will cost you more if you miss out.
5:
Review Your Services Agreement, Terms & Conditions
When was the last time that the Terms & Conditions or Services Agreements of the company that you are a Director of, were reviewed?
Do you have a register of all the signed agreements between you and your clients?
How is it stored?
If you cannot confidently answer one or more of these questions about the company that you are a Director of, please contact the Streeterlaw office so that we can help you with your processes. A small amount of time spent now reconciling those records, reviewing your companies Terms & Conditions may save you thousands in the future.
6:
Set High Expectations- Internal Governance
Internal Governance – does your organisation have a documented internal framework and system?
Internal Governance is the framework that regulates, controls, maintains and updates the internal decision-making systems, standards and procedures that allow you as a Director to confidently make informed decisions, disclose conflicts of interest and ensure that the right flow of information has been provided to you to make decisions.
You may be in breach of your duty of care, skill and diligence, if you fail to create an adequate framework and system. Did you know that your company may be able to reduce its insurance premiums by implementing an external audit.
7:
Set High Expectations- Regular external and internal audits
Do you have an internal/external audit system?
If you have not opened your organisation to an external/internal audit on processes or systems, you may not only be paying more for premiums, but you may be limiting the opportunity to grow sustainably.
As a Director, setting high standards for the way your company works and how your client relationships are managed will not only add value to your company, but will give you confidence that your company is fulfilling its obligations.
External auditors ensure that your management system, processes and documentation procedures meet all the requirements for standardisation and quality assurance.
Quality matters because it demonstrates to your employees and clients that as a Director, you care about them and the work of your company.
External and internal audits demonstrate that as a Director, you are meeting your positive obligations (statutory and fiduciary duties) to act in the best interests of the company.
8:
Set High Expectations- Be properly informed
Board Packs/Reports – A Board of Directors is more likely to make the right decision if they are properly informed with the right information.
The key is preparation, it does not cost much to prepare properly, however it may cost you and your company if you do not.
We support directors regularly by assisting them with the development of their processes, resolutions and other aspects required for detailed board papers, minutes, company folders, compliance and company secretarial duties.
Contact the Streeterlaw office today to have a confidential discussion about how we can assist you in your role as a Director of a company with a corporate governance review.
9:
Address Unresolved Disputes
Where there is smoke there is fire. Put it out or know your options. As a Director of a company you have a positive obligation to resolve disputes quickly and carefully.
Do not put unresolved disputes in the too hard basket. Believe me, they get harder and they won’t go away by themselves.
If you have niggling concerns, it probably means that you should be having a confidential discussion with us to ascertain your dispute resolution options. It may be a bigger problem than you thought, or a small distraction you can move past.
10:
Act now
The above points help you as a Director to act in the best interests of the company by the careful and thoughtful discharging your obligations through the creation of a framework that will protect you in your role as a Director and your company.
At Streteerlaw we want to protect, educate and inform you and your organisation so that you can confidently govern well by fulfilling your obligations as a Director. Need assistance? Call Streeterlaw now on 02 8197 0105 or fill out the below webform!
Further Reading...
Understanding the ACCC and your role
6 September 2019
Fact or fiction: the ACCC is only for consumers. Many Directors hold unhelpful misconceptions about the how the Australian Competition and Consumer Commission (ACCC) can
Not-For-Profits – Understanding the ACNC and Your Role
6 September 2019
The ACNC – Keeping Australian Charities Honest The Australian Charities and Not-for-Profits Commission – commonly known as the ACNC – is the regulator of charities
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