Do you have a small company or are you thinking of setting one up?
Do your company Directors know what their ASIC responsibilities are?
Many people (including company Directors and Board members) think of Risk Management purely in Health and Safety and/or Financial terms. In my opinion this is a non-holistic view and a risk in itself.
If this sounds like you, ASIC has an invaluable ‘How to guide’ on what to do. The section on Boards and Directors is excellent.
Limiting risk to $ and safety doesn’t take into account Reputation, Branding, and Marketing (increasingly important); Legal, Governance, and Compliance (ignore at your own peril); Environmental challenges (hot topic); Strategic Objectives (often hard to define even if you have the time); Opportunity costs (personal and business); Human Resources (OSH is a sub-set); Operational challenges (fighting multiple fires on several fronts); Changing markets and consumer trends (local and further afield); and Technology, including Document Control (a moving beast).
Since reading what ASIC and others had to offer, I instigated conversations with the directors of small companies to see the state of play.
When I asked these questions:
- Do your company Directors know what their ASIC responsibilities are?
- Do your Directors have training in governance, compliance, and risk management in relation to being a Director of a company?
There has been a resounding and universal ‘NO’ to both questions. This was irrespective of if the company had a sole Director or a Board of Directors. In several cases I was told the company had lawyers and risk people on the Board and they thought this was enough.
This revelation floored me, given the possible legal and financial ramifications for the individuals if they do not carry out Director duties with due diligence. If they don’t know what their duties and responsibilities are, how can they carry them out? Ignorance may be bliss but is no defence.
What could I, a small business owner who specialises in delivering corporate style risk management to other small businesses, do about the situation? The answer was simple; get the message out there to as many people as I can.
To this end, Risk.Report have developed a training session on Board and Director responsibilities specific to small business governance, compliance, and risk management. If you are interested in organising or attending a session, or having a free 30 minute risk brainstorm, please contact us.
Leanne Bicknell Director Innovation and Development Risk.Report
+61 (0)455 330 032 email@example.com
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Resources for those interested and that have time
Australian Securities and Investment Commission https://asic.gov.au/for-business/small-business/starting-a-company/small-business-company-directors/
Australian Institute of Company Directors https://aicd.companydirectors.com.au/
CPA Australia https://www.cpaaustralia.com.au/
Governance Institute of Australia https://www.governanceinstitute.com.au
Corporate Directors Association www.directors.com.au