Our Two Hats

Nov 5, 2019

In small businesses it is often a reality that shareholders and directors are the same people. We are taught that the company is a separate entity, but that the people influence the culture. Ultimately the entity serves people, who thus have a vested interest in its success. This is all fine and well theoretically, but when the roles are not vested in separate people, these conflicts may result in failure. So, what to do if this is your reality?! My advice would be this – I have learnt a simple rule. Segment the roles in your mind. Critically think which functions and decisions all in which role. In other words, is it an operational issue ? Then it is a decision for a director forum. If it is an investment question – then it is about shareholding and falls there.

Our Two Hats

November 05, 2019

In small businesses it is often a reality that shareholders and directors are the same people. We are taught that the company is a separate entity, but that the people influence the culture. Ultimately the entity serves people, who thus have a vested interest in its success.
This is all fine and well theoretically, but when the roles are not vested in separate people, these conflicts may result in failure. So, what to do if this is your reality?!

My advice would be this – I have learnt a simple rule. Segment the roles in your mind.
Critically think which functions and decisions all in which role. In other words, is it an operational issue ? Then it is a decision for a director forum. If it is an investment question – then it is about shareholding and falls there.

Now, let’s talk about loyalties…

Well, the only loyalty a director should have is to the company. Directors must act in the best interests of a company. Where directors fail to do so, they could be held liable. Shareholders carry liability in extreme situations only but owe a duty of good faith to each other.

Without segmenting properly, your relationships and business can ultimately fail. Best to ensure that you clarify expectations and segment as set out above!

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Nicolene
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Business Silver Linings – Post-Election and Down in the Dumps Economy? Possible?

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In South Africa, many businesses are family-owned and operated, with ownership often passing from one generation to the next along the male line. Traditionally, this means that many women support their fathers, brothers, and spouses in the business. Although this sounds familiar or even “as things should be” situation, managing a family business involves navigating complex personal and professional relationships. Be that as it may, family businesses are more than that – they are central to the reality of many families. It is not just another business; it goes to the very core of financial prosperity and home dynamics.

It is indeed a complex situation, but let’s add another layer of complexity, one that we rarely hear ventilated until we are in a courtroom. What happens when a woman is the leader instead of a man? Perhaps, let me put it bluntly, it is when a woman employs her husband, partner, father, or brother.

The issues this brings is a shared responsibility to address, it refers to how we raise our children and support our friends and families that find themselves in the grips of this reality. If we get this right, this will not only benefit the women at the helm but also strengthen the family business sector and the family unit as a whole.