AmCham Slovakia

How to implement basic management principles in small businesses.

Corporate governance, known as governance, is often seen as something that belongs to the world of large corporations. Governance is the last letter in the acronym ESG. Most of us have already encountered the topic of corporate sustainability. However, many entrepreneurs often think that implementing governance principles is too complicated or expensive for them. However, the truth is that even small and medium-sized enterprises can benefit significantly from effective management. And this without having to introduce unnecessary bureaucracy. The basic principles of governance can be implemented easily and are worth it for companies.

Why is governance important even for small businesses?

Governance helps companies establish clear management rules, improve decision-making, minimize risks, and build trust with customers, partners, and investors. In smaller companies, it can also be the key to long-term sustainability. Managers in such companies usually hold multiple positions at once, which can increase the risk of errors. Governance improves efficiency and reduces the likelihood of mistakes or crisis situations.

Governance principles without unnecessary bureaucracy

1. Start with a simple code of ethics
Create a document that defines the core values and principles of your company. Such a set of rules does not have to be long or complex – just a few points that clearly articulate how the company stands on ethics, responsibility and transparency are enough. This code will serve as a basis for the behavior of management and employees, as well as for communication with partners.

2. Transparency as the basis for success
Make sure your company’s ownership structure is clearly defined and understandable to all stakeholders. Transparency in financing, accounting, and decision-making processes builds trust and reduces the risk of misunderstandings or conflicts. Verify that you are meeting all legal obligations to disclose data and information about your business.

3. Implementation of basic internal controls
You don’t need to immediately create a complicated system of controls or internal audits. Simple procedures, such as regular checks of important documents, two-step authorization of larger financial transactions, or a regular review of contracts and agreements, are enough. These steps will protect you from errors and help identify potential risks.

4. Division of roles and responsibilities
Clearly defining who is responsible for what in your company and how decisions are made can significantly improve efficiency, prevent confusion, and reduce the burden on individual employees.

5. Stakeholder management
Maintain good relationships with your partners, customers and employees. Regular, open and understandable communication tailored to the relevant target group is the foundation. Involving key people in decision-making processes increases loyalty and supports long-term growth.

Benefits for your business

Implementing basic governance principles brings both small and large benefits:

• Trustworthiness: Your partners and customers will see that your business is transparent and reliable.
• More effective decision-making: Clear rules and processes will improve the quality of decisions.
• Problem prevention: Internal controls and clear decision-making powers minimize risks.
• Better performance: Both employees and management work more effectively when they have clearly defined goals, are involved in decision-making processes, and are given appropriate accountability.

Simplicity comes first

Implementing governance doesn’t have to be complicated or expensive. Start small and take steps to improve the way your business is run. If you’re not sure where to start, consult with an expert. External consultants can help you create a strategy that’s tailored to your needs and supports your business plans.

RUŽIČKA AND PARTNERS Law Firm offers comprehensive professional support in the field of ESG through a multidisciplinary team led by Nada Roštek.

NAĎA ROŠTEK
Partner, RUŽIČKA AND PARTNERS

Naďa Roštek is the leading partner of RUŽIČKA AND PARTNERS' competition law, compliance and ESG practise. In addition to her work in Slovakia, she is also active in this area in the Czech Republic within the CCS Legal & Tax partner office. The latter is a member of the Association of Sustainable Business, where Naďa actively engages. Together with a multidisciplinary ESG team, she is involved in the development of corporate ESG strategies and ESG implementation projects in both jurisdictions. These activities serve as a key tool to increase value and build credibility for companies in the eyes of consumers and business partners. Thanks to her presence in both the Czech Republic and Slovakia, she is able to create unique solutions that take advantage of both markets. This enables more effective implementation of ESG strategies for clients in both countries.

**

picture: Pexels, Daniel Xavier