Good financial governance needs board packs

Financial governance is often not at the top of an SME's agenda. A small business may be able do without it, but as a business grows it becomes essential for keeping control. One part of good financial governance involves board packs, and it’s amazing how many SMEs don’t have them.

For a business to succeed and remain financially resilient the owners and the board must have a strong grip on the finances. If they understand how the business is performing financially, they can make the right decisions that make the business prosper. They need to understand the historic financial results to date and have forward looking information to help them plan. A good board pack does this.

Financial governance doesn’t stop at the board pack. It also involves instilling a culture of financial responsibility and checks and balances across the business, robust internal controls and a culture of accountability and ethics to ensure that the financial information is accurate and the risks of fraud and corruption are minimised.

Finance plans should support the strategic plan and the board pack that the board and owners receive should be clear, concise, and timely, looking at performance to date against the plan and expected performance in the future.

Having worked in finance for FTSE 100 groups I’ve seen some of the best board packs. In SMEs I have seen some of the worst (or not seen them at all!) - when they finally recognise that they need a good board pack, it’s sometimes too late and they have lost control.

Is your board pack good enough?