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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have been in business for almost two decades, and for a moment there, I really thought I had seen it all! I was at the top of my mountain and very cosy up there. However, I have been humbled these last few months. I have been through trying times before, but this was like an earthquake. Not that I have ever been in one, but I would imagine it feels something like this. Around every corner, there have been problems to solve. Significant changes were calling for agility. Sometimes, on our business journey – we need to undo and redo our businesses and ourselves. It is a lot of work and effort, but sitting back and looking at the finished picture, well, that is exhilarating. So, if this sounds familiar, hang in there; it will be worth it!

Share via:

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also like…

The Rain Keeps Pouring – Keep Listening

The Rain Keeps Pouring – Keep Listening

have been in business for almost two decades, and for a moment there, I really thought I had seen it all! I was at the top of my mountain and very cosy up there. However, I have been humbled these last few months. I have been through trying times before, but this was like an earthquake. Not that I have ever been in one, but I would imagine it feels something like this. Around every corner, there have been problems to solve. Significant changes were calling for agility. Sometimes, on our business journey – we need to undo and redo our businesses and ourselves. It is a lot of work and effort, but sitting back and looking at the finished picture, well, that is exhilarating. So, if this sounds familiar, hang in there; it will be worth it!