Governance: making clearer decisions, faster

Good governance is not a luxury reserved for large corporations. It is an efficiency driver. When roles are clear and decisions are framed, everything accelerates. Here is how to set up SME governance that actually works.

Many SMEs do not really have governance. Decisions are made informally: the director calls a partner on the phone, or it is approved over lunch. It works until the day it doesn't. A disagreement arises, and suddenly nobody knows who had promised what.

Governance is simply about organising these practices. Formalise them. Write them down. Live by them.

01.The building blocks of sound governance

A well-governed SME generally has three elements:

• A strategic council or committee where key decisions are made
• An annual general meeting where partners approve the accounts and strategic direction
• A shareholders' agreement documenting the rules (voting, exit, deadlock, etc.)

None of these building blocks come naturally in a young SME. But each one creates clarity.

02.The strategic council or committee

This is the engine. A council brings together the director, partners and sometimes an external board member. It meets regularly (monthly or quarterly) to decide on important matters:

• 3-5 year strategy and plans
• Investments above a financial threshold
• Key hires
• Partnerships or M&A
• Performance reviews and adjustments

03.The annual general meeting

It is legally mandatory for SA, SARL and SAS companies. For EURLs or sole traders, it is not required. Yet holding one changes everything.

Why? Because it creates a unique moment where partners meet, compare their visions, approve results and look ahead together. It is a very powerful cohesion mechanism. And a transparency mechanism too.

• Presentation of audited accounts
• Management report (performance, risks, outlook)
• Vote on profit allocation (dividends vs. reserves)
• Vote on major strategic directions
• Open discussions between partners

04.The shareholders' agreement

This is the document that prevents wars. It formalises the rules between partners:

• Voting rights: who votes on what, required quorum
• Exit rights: how to sell shares (pre-emption rights, valuation)
• Sensitive situations: departure, death, irreconcilable conflict (deadlock)
• Partner roles: who is director, who consults, who supervises

Drafting a shareholders' agreement requires real thought. It is the conversation you should have before setting up the company, but which never happens. Well, better late than never.

05.Clarifying decision levels

Clear governance also gives every employee their place. For example: who decides on hires? The HR director? The managing director? The partners?

Defining 3-4 levels creates speed:

• Level 1 (Assembly): direction beyond 5 years, capital, M&A, legal structure
• Level 2 (Council): annual plan, investments above €50k, executive hires, partnerships
• Level 3 (Director): operations, approved annual budgets, day-to-day HR management
• Level 4 (Managers): internal organisation, management, processes

With these clear levels, the director knows they can decide quickly on 80% of matters. The truly strategic 20% go up to the council. It is liberating.

06.How to get started without overload

You may be thinking: "That sounds great, but we're starting from scratch. It's heavy."

No. Start small:

1. Launch a quarterly council (just the director and partners, 2 hours)
2. Document decisions (1 page: date, topic, decision, who does what)
3. Hold a simple AGM once a year (accounts, outlook)
4. Put in writing who decides what (1-2 pages)

This takes 3-4 months. The benefit appears immediately: fewer back-and-forths, faster decisions, a more aligned team.

07.The external board member

Many SMEs hesitate to bring in an external third party. This is a false problem. An external board member (consultant, mentor, seasoned client, etc.) brings:

• A fresh perspective on strategy
• Distance from internal tensions
• A guarantee of seriousness in debates (harder to fall asleep)
• External credibility (bankers and investors appreciate it)

08.In summary

Good governance is not a luxury. It is infrastructure. It creates speed, trust and sustainability. At Fifty Bees, we help SMEs put this infrastructure in place without overload, starting from wherever they are.