Who takes decisions in your company? How and when are decisions made in your business? Who is responsible for the desired results? Do you know which are the five entities that must direct your company to take it to great heights?
Business results depend entirely on the Who, When and How decisions are made in a company.
One of the thirty errors of the entrepreneur is coincidentally: "Postponing decision making in the company."
As a consultant I have specialized in medium-sized companies, these businesses sell an average of eight million dollars a year, have more than two hundred and fifty workers and can generate a hundred thousand dollars or more of monthly profit for their owners.
Many of these companies are owned by two or three partners.
Some do not use the organs required by law. Two of them are not only created in the constitutive pact, but they are instances to formalize and document the different types of decisions that must be made in every mercantile society.
Look how interesting the following:
“A company is owned by two brothers and two cousins. They are fully involved in the operation of the business.
They sell five hundred thousand dollars a month. They have three hundred employees.
The differences between them are very great and the challenges presented by the new economy have forced them to improve managerial management.
What decision did they make? They appointed a Board of Directors.
For twenty years they have met every Tuesday and there they have made the decisions; but the company is no longer the same. Now the challenges are greater.
Appointing a Board of Directors is something that I recommend to all my clients, but in this case there is a particular situation. In this Board of Directors, the partners wanted to participate within them.
However, they do work in the company occupying different jobs.
A month ago the Board of Directors appointed an external General Manager, who will be their boss.
We will see how the experiment turns out. These four partners are the owners of the company; but in daily management they will be under the authority of a General Manager who will be their direct boss. What do you think? A General Manager who will be the direct boss of the owners of the company.
It will be quite a challenge. ”
In this article I wanted to share with you a brief description of the three organs or entities, which I recommend exist in any medium-sized company.
Investors Assembly
It is the supreme body of the company.
It is where strategic decisions are made and where the desired policies and results are defined.
When a single "person" owns 100% of the shares.
The Shareholders' Meeting is not just any meeting of partners one afternoon, to talk about the company. It is an official act, which must be convened as established by law. From this "meeting" an Assembly Minute must be drawn up, which will be transcribed in a book that has legal status, it is called: "Shareholders Meeting Book".
What is agreed at the Shareholders' Meeting must be compliant.
The commercial laws of our countries oblige companies to hold at least one Ordinary Shareholders' Meeting every year, after the fiscal closing. In that Assembly, the partners will know the Financial Statements and the results of the company, will see the inventories and will decide if profits are distributed.
Extraordinary Assemblies can also be carried out to make other types of decisions.
My recommendation is to formally call Assemblies, whenever major decisions are being made in the company. This legalizes the decisions and all partners will know the decision and approve the path that the company will follow.
Board of Directors
In small and medium-sized companies, with one or few partners, the figure of a Board of Directors seems to be left out; But you must be clear that when the company was legally constituted, a Board of Directors was created that has powers and responsibilities before the law.
These are aspects that some small companies handle lightly. They name anyone, because they consider it a simple requirement, but those people are responsible under the company's business law.
Even the figure of the "Prosecutor" that exists in almost all our legislation, has even criminal responsibility if he does not report situations that could put the life of the company at risk.
In many of our small and medium-sized companies, the same partners are the members of the Board of Directors. Generally the founder or leader of the project is appointed President of the society. And it very often happens that the President of the Board of Directors is the same General Manager of the company.
The Board of Directors must meet monthly. A record of each session is also drawn up and taken to a book called: "Board of Directors' Record Book."
The Board of Directors is also often called the Board of Directors.
In this body the President reports on the financial situation of the company, in the month that just ended. About the results of the company and each of the businesses.
Here, more operational decisions are made, which have an immediate impact. For example, the Board of Directors would appoint the General Manager of the company. You can also decide on new products, on the company's budget, on new strategic investments directly related to the business that the company runs.
The decisions made by the Board of Directors will be executed by the President or the General Manager of the company.
The Board of Directors may invite company officials, external consultants and others to support decision-making, when deemed appropriate.
Management Committee
I recommend to my clients to implement the Management Committee.
It is a weekly meeting of two hours maximum, where the General Manager meets with his management team (head of department) to learn about business operations, to make joint decisions and for each to report on the results achieved in his work area.
It is tremendously useful because it strengthens and stimulates teamwork.
I suggest that a minute of these meetings be drawn up so that everyone is aware of the agreements made and the commitments of each one. At the next meeting, the minute is read and the results are reviewed.
Success or failure in business is completely tied to the way decisions are made.
My recommendation for the medium-sized companies that I serve (Annual Sales = 6 to 12 million dollars, Number of Employees = 250 or more) is to implement these three organizations in the company:
- Shareholders Meeting Board of Directors Management Committee
Of course, the figure of the General Manager is leading. He is the leader of the company, he is the conductor of the orchestra.
If your company is a single owner, and you are the one who holds the General Management, implement the Management Committee and meet with your team every week to monitor the results.
If you have constituted a mercantile company, you must call the Shareholders' Meeting once a year and at least every three months the Board of Directors. This if you have a small company.
But if your vision is to create a great company, you already have in your hands the structure on which you will build that growth.
