Think Governance Is Only For Big Companies? Think Again!

Governance is not just for large corporates

Corporate governance is often seen as something reserved for listed companies and layers of reporting, formal board structures and regulatory scrutiny. But this perception misses a key point. Transparency and good governance matter just as much for private companies, owner-managed businesses and growing SMEs. In many cases, the consequences of getting it wrong can be even more significant.

What governance really means

At its core, governance is not about bureaucracy. It is about how decisions are made, documented and challenged. Under the Companies Act 2006, directors of all companies owe duties to act in the best interests of the company, exercise reasonable care and avoid conflicts. Good governance provides the structure that allows those duties to be met in practice.

The value of transparency

Transparency plays a critical role here. Clear records of decisions, defined roles at board and shareholder level and accurate reporting create accountability. They also provide protection for both the business and the individuals running it. When decisions are well documented and authority is clearly allocated, the risk of disputes, regulatory issues or personal liability is significantly reduced.

Why private companies should care

For private companies, transparency is also a commercial asset. Investors, lenders and buyers increasingly expect clear governance frameworks, even where there is no formal regulatory requirement. Businesses with strong governance are better prepared for funding rounds, exits or periods of rapid growth. They inspire confidence because they can demonstrate how decisions are made and risks are managed.

Common governance blind spots

Yet governance is often overlooked until something goes wrong. Common blind spots include informal board decisions with no written records, outdated shareholder agreements, unclear delegated authority and limited visibility over ongoing compliance obligations. These issues may feel manageable day to day, but they can quickly escalate into costly disputes or delays when scrutiny increases.

Making governance practical

The good news is that governance does not need to be complex or disproportionate. Effective frameworks can and should be tailored to the size and nature of the business. Clear documentation, sensible reporting structures and a consistent approach to oversight can make governance both practical and valuable. When supported by the right systems, businesses gain a holistic view of their obligations and can identify gaps before they become problems.

Governance as a strategic asset

Governance is not about ticking boxes or mimicking listed companies. It is about transparency, accountability and long-term resilience. Regardless of size, every company benefits from governance that tells a clear, confident story and one that stands up to scrutiny, whilst supporting sustainable growth.

If you are considering how to strengthen governance in your business, expert advice can help ensure your structures and processes are both practical and robust. We support companies in building frameworks that provide clarity, accountability and confidence across the organisation and can assist where guidance or ongoing support is required.