March 16, 2025 • 23 mins
Governance—a word that makes many small business owners recoil. But what if I told you it's not about bureaucratic red tape or corporate boardrooms, but simply about creating clarity in how you run your business?
In this enlightening conversation with Stephanie Bates, Operations Manager for KPMG Enterprise Advisory and a Director of the Canberra Business Chamber, we unpack what governance actually means for small businesses. Stephanie demystifies this often-intimidating concept, explaining that governance is essentially about "setting some guidelines around how you want your staff to interact, having a few policies and some basic how-tos in place." Far from being a burden, these structures create the foundation for sustainable growth.
We explore when to start implementing governance measures (hint: earlier than you think), how to approach position descriptions in a constantly-evolving small business environment, and practical approaches to financial oversight that match your risk appetite. Stephanie shares valuable insights on communication strategies that ensure your team understands expectations, from morning stand-ups to email acknowledgments. We also discuss the complex web of legislative requirements small businesses face—from varying payroll tax thresholds to workers' compensation rules—and how to navigate them effectively.
Perhaps most compelling is our discussion about ethics and trust as the bedrock of small business success. As Stephanie aptly puts it, "If you're transacting with people in the economy, you are building trust... and the ethical foundation then becomes trust." For small businesses especially, where the owner's reputation is directly tied to their offering, ethical governance isn't just nice-to-have—it's essential. Whether you're just starting out or looking to strengthen your existing business structure, this conversation offers practical, achievable approaches to governance that will help your business thrive without drowning in paperwork.
This episode is supported by CareSuper.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:09):
Hello and welcome to the Canberra Business Podcast.
I'm Greg Harford from theCanberra Business Chamber and
I'm joined today by StephanieBates, who's the Operations
Manager for KPMG EnterpriseAdvisory, the Director of the
Canberra Business Chamber andformerly the Head of Corporate
Services for CharterTech Steph.
Welcome to the podcast.
Speaker 2 (00:25):
Thank you, so pleased to be here.
Speaker 1 (00:27):
Now you're really passionate about small business
and especially small businessgovernance, which sounds a bit
scary for many people.
But tell me, for small business, what does governance mean?
Speaker 2 (00:40):
Yeah, absolutely.
Look, governance is one ofthose big words where people
kind of shy away and go, oh no,small business doesn't really
apply to me.
But in my view, businessgovernance especially for SMEs
or small business is really justsetting some guidelines around
how you want your staff tointeract, having a few policies
and some basic how-tos in placeso that you can guide your staff
(01:03):
around how it is that you wantthem to behave in your
organisation.
Speaker 1 (01:08):
So yeah, so in a small business that's not having
a board that looks after thebusiness, it's just about having
policies, procedures andprocesses in place to make sure
everyone's doing what they needto do.
Speaker 2 (01:17):
Yes, absolutely so.
Definitely doesn't have to havea board, but certainly, for
example, if you have a financedelegation policy in place.
So as a business owner, as aCEO of a small business, you can
stipulate to your staff how itis that you want them to
transact with your vendors andat what point they need to
involve you, for instance, as anexample.
(01:39):
So at what?
Speaker 1 (01:40):
point.
Do you think small businessesneed to be thinking about
processes around governance,Because often a business will
start with a single person or acouple of people.
They get together, they form abusiness, they get going At some
point.
They're not the only ones inthe business.
When's the right time to bestarting to think about that?
Speaker 2 (02:03):
Look, I would say from the beginning, to be honest
, I would encourage anyone in asmall business to think a little
bit ahead for three to fiveyears and I know that sounds a
little bit daunting butcertainly laying the foundation
of how you want your staff tobehave, whether there are HR
policies that you require,whether you want to set up
(02:24):
regular meetings with yourdirectors on how you want to
discuss the business.
I think that's really importantto do from the very beginning.
But certainly, if you have avision to grow your business,
start as early as you can.
Speaker 1 (02:39):
It sounds like a lot of process, though.
How do you get started withthis if you're literally just
starting out?
Speaker 2 (02:47):
Yeah, look, I think that there's just some key
things to consider.
So, for example, a really goodplace to start is there's lots
of good resources available, andI would point people to the
AICD website.
They have some really goodguidance around small business
governance.
But probably what I would sayto anyone in small business is
(03:09):
have a look at the CanberraBusiness Chamber website as a
really good starting place.
There's a lot of resources thatyou and your team have collated
over the years and certainlyavailable on the website.
So an example of something thatyou might want to consider
looking at at the Canberrabusiness website is position
role descriptions for your team.
(03:30):
So why is that important?
Well, it's important to giveyour staff the understanding of
what it is you expect them intheir role.
It's important for when theyhave performance discussions and
also it's just important forthem to validate what it is
they're doing within yourbusiness day to day.
Speaker 1 (03:49):
Do you think there's a gap there?
Do lots of small businesses nothave job descriptions organised
?
Speaker 2 (03:55):
I mean I can't speak for all businesses, but
certainly the ones that I cansee and have been involved in.
I think position descriptionsare probably something that are
a bit of an afterthought in myopinion, and I think it helps to
have that established, becauseit sets clear boundaries on what
it is that you know person A isdoing versus what person B is
(04:17):
doing, and that's important toreally have a consolidated view
on the business and go forwardas a team.
Speaker 1 (04:25):
Now in small business , though, those job descriptions
at least at a practical levelare going to evolve quite
quickly over time.
If you've only got two or threeemployees in your business, you
don't necessarily have theluxury of being able to stick
with your job description.
How often do you need to comeback and review those?
Speaker 2 (04:44):
That's a really good question.
I would say come back andreview them on an annual basis.
So if you have a performancecycle that goes on an annual
basis, certainly have a look atwhat your position descriptions
look like.
And yes, I think probably for avery small business of two to
three, five staff, it'sdifficult to have position
descriptions that have reallyjust narrowing down on what that
(05:09):
person is doing.
And often what you find isbusiness owners do a lot to
support the business A to Z.
But what you're ultimatelytrying to facilitate is my
example earlier, the financialdelegations, for example.
Do you want two people to signthe bank to release payments,
for instance?
That will evolve over time asyour business grows.
(05:32):
You might want to set that up,you may not.
It just really depends.
Speaker 1 (05:37):
So let's talk a little bit about financial
oversight and, I guess, riskassessment.
What do you think smallbusinesses need to be doing in
that space?
How do they decide whether theyshould have one or two
signatures on the bank account?
Speaker 2 (05:51):
I think it comes back down to the owners of the
business assessing what theirrisk appetite is.
So it's not always practical tohave two people to say and
wholeheartedly agree it's reallyjust good governance.
From a good governanceperspective, you would have one
to load a transaction and oneone to release the transaction.
But it doesn't mean that youhave to have that in place.
(06:14):
So it's really just as abusiness owner does it make
sense to have that in place?
If it doesn't make sense, thendo what makes sense for you, but
have a process and communicatethat with staff.
I guess it's the ultimatemessage is are your staff aware
of what your expectation isaround your risk appetite and
around your financialdelegations and how it is that
(06:36):
you want them to transact?
If they understand and if it'sdocumented, I think that's
sufficient.
It doesn't have to be a formalpolicy, but certainly, certainly
it has to be communicated.
Speaker 1 (06:47):
But how do you communicate that if you're not
writing it down?
I mean, surely best practice isactually to have a written
policy that you can point to?
Speaker 2 (06:53):
Yeah, absolutely.
Best practice is always to haveit in a written document while
staff read it wholeheartedly.
That's always the question, butcertainly you can point back to
it.
I would probably say setregular meetings, set an agenda.
Set a fortnightly meeting, amonthly meeting with your staff
If you're the director or thebusiness owner.
(07:16):
Set aside a weekly discussionwith your business partner or
with your finance people just tounderstand the position of the
business.
Make sure you set that time indiary, because if it's not in
the diary it won't happen.
So it's really just what mediumis best to communicate with
your staff.
(07:36):
If your direction is by email,then pop it in an email.
If you don't want a formalpolicy and such.
Speaker 1 (07:43):
And in terms of getting people to pay attention
to the things that are said orthe policy, whether it's written
down or not, you make a goodpoint that not everyone reads
everything.
Have you sort of seen tips andtricks over the years to help
get messages out aroundgovernance, out to frontline
staff, for example?
Speaker 2 (08:04):
Yeah, I, um, I guess it depends on your industry.
I think, um, what I've seen workreally well is, um, some sort
of a morning stand-up, forinstance.
It doesn't work in everyindustry, but certainly if
you're working on a project thatyou're delivering, you might
have a think about having aweekly or a daily stand-up just
to communicate some of thosereally high levellevel things
(08:26):
that you want to draw out to dowith the project.
But you could also use it as aforum to raise any changes in
policy or anything that you wantthem to do differently.
That doesn't have to be daily,it doesn't have to be weekly, it
could just be a monthly thing.
And if you wanted to do anemail, an email would work too.
(08:48):
I would always encourageanything that you want to
formalise within your business,certainly to have in writing.
And what I've seen work verywell as well and this is
probably not so much in a small,small business, but bigger
business is have some sort ofacknowledgement from staff to
(09:08):
say, yes, I've read that and Iaccept that.
That's what I'll be adhering to.
Speaker 1 (09:13):
And that becomes an issue as you bring new people
into your business over time aswell.
Right, because it's all verywell briefing the team that
you've got in place now, but insix months' time, when your
business has grown and you'vebrought another four people into
the books, there's a wholebunch of new people that need to
be across the sameconversations yeah, absolutely.
Speaker 2 (09:31):
And look, I think that larger businesses obviously
have this in place very wellwhere they do onboarding
training, where you would wrapall of new staff into what your
key policies are.
A small business probablydoesn't so well, but it's.
It's a matter of then gettingyour team on board to ensure
that whoever comes on board isis well advised and educated
(09:53):
around what the key policies andand desires of the business
owner are in terms of handoverand all of that sort of thing
now, if you're running a smallbusiness, if you're a director
of a small business, youobviously take on a number of
responsibilities to shareholdersand you've got some statutory
responsibilities and obligationsas well.
Speaker 1 (10:15):
Do you think directors in small businesses
really understand those?
Speaker 2 (10:20):
I'm not sure that directors are fully across all
of the legislative requirements,and I would really encourage
people who are establishingbusiness for the first time to
really get a sense andunderstanding of what impacts
their particular business.
So, for example, what do I meanby that?
Um, things to be aware of iswhen do payroll tax obligations
(10:44):
kick in?
For example, um are you liablefor any particular statutory
reporting within your industry?
Do you have to report forworkplace gender equality
Generally in small business?
You probably don't, but it'sgood to have an understanding of
, if you don't, why you don'tand at what point does
(11:05):
thresholds kick in?
So I think another good exampleis casual employment.
Conversion, for instance, islegislated under the National
Employment Standards.
It's not applicable to convertcasual staff after 12 months in
an entity that has less than 15staff.
But if you're on that threshold, it's important to understand
that you are on the cusp and theconsequences of having casuals
(11:30):
employed in your organisation.
Speaker 1 (11:31):
As an example, and some of these obligations vary
from state to state andterritory to territory right.
So the rules that apply here inthe ACT are not necessarily the
same as those that apply acrossthe border or up in Queensland.
Speaker 2 (11:44):
Yeah, absolutely Certainly.
Payroll tax, for example, thethresholds are different in each
state.
So if you're in a smallbusiness entity and you are sort
of on the cusp of moving into adifferent state, I would
encourage small business ownersto leverage some of the
resources on the CanberraBusiness Chamber website, for
(12:07):
instance, or seek additionalsupport from external sources,
just to make sure that we'veticked all the boxes, because
obviously legislativerequirements are a little bit
different to just internalpolicies.
You have to adhere to those,and I guess the purpose of small
business governance is reallyto manage your legislative
requirements and also your risks.
(12:27):
So, as long as you haveeverything that you do in your
business with those two lensesin mind, that's probably a key.
Speaker 1 (12:36):
So what are the big things that we need to be
thinking about from a smallbusiness point of view?
You've got taxation the ATO isthe source of truth there but
you've got payroll tax.
You've got workers'compensation and health and
safety issues.
What are the other things thatsmall businesses should be
thinking about?
Speaker 2 (12:57):
So I think really one of the things that we need to
think about here are, yes, thepayroll tax thresholds as they
come in your BAS workings andand your reporting obligations.
What I've found in my personalexperience is the treatment of
things like depreciation.
(13:17):
So, depending on the industrythat you're in, it really
changes as your revenue profilechanges.
So those are some of the keyconsiderations.
If you're transacting withdefence, you might have
thresholds that apply fordifferent member registrations
(13:38):
that you have to consider, suchas DISP.
Workplace gender equality kicksin at 100 headcount, so that's
probably not so applicable for asmall business entity.
Modern slavery is a hot topicat the moment.
I think that's something thatpeople have to report against,
but that's something that kicksin at a million revenue.
(14:01):
So, again, some of the thingsthat apply to larger businesses,
but certainly for smallbusiness, the payroll tax
components I think are critical.
Your BAS and your ATOobligations, workers'
compensation, as you mentioned,those are certainly the keys.
Speaker 1 (14:19):
Yeah, so that gets pretty confusing right.
All these different thresholdsand different definitions and I
know the Chamber and the broaderChamber network have been
campaigning for years for a bitmore standardisation across some
of these.
Do you think small businessesget confused about the different
rules that apply?
Speaker 2 (14:37):
Yeah, I think absolutely.
It certainly is confusingbecause if you're looking at
just even workers' compensation,that range changes how it's
applied, different thresholds.
Some states will lump all ofyour actual turnover and all of
your actual salary costs tocalculate your premium, whereas
(15:01):
others will exclude it.
So it's extremely difficult tonavigate as a small business, I
think.
Speaker 1 (15:10):
What about ethics?
You know most of the smallbusiness, in fact, all the small
business people I talk to arekeen to do the right thing.
Broadly, how important do youthink it is that people are
embracing an ethical approach tosmall business?
Speaker 2 (15:25):
Well, as a chartered accountant, I would say it's
critical to your business, but Iwould say that, as a chartered
accountant, I would say it'scritical to your business, but I
would say that as a ca.
So look, I think ethics is oneof those things is, if you're
transacting with people in theeconomy, you are building trust,
and trust is the ultimatefoundation for anything that you
do, and the ethical foundationthen becomes trust.
(15:49):
So, to build your business, ifyou don't have the trust and
you're not working in an ethicalway, then absolutely you have
to come back to that groundworkof having your internal
governance, of teaching yourteam how you want them to
interact with your clients, howyou want them to interact with
your suppliers and all of thatsort of thing.
(16:12):
So I think it's absolutelycritical, especially for small
business, where your name as adirector is linked directly to
the services or the productsthat you provide.
So I guess if you take it backto that level, it's ultimately
your name, not your businessname, that you're selling as a
small business, and I thinkthat's critical to really take
that lens for ethics especially.
Speaker 1 (16:35):
In moving from perhaps an ethical approach to
one that's a bit more leadingedge corporate social
responsibility.
Again, most business people Italk to want to do the right
thing for the planet and fortheir people and everything else
.
Do you see that as being reallyimportant for small business to
embrace?
Speaker 2 (16:53):
I think it's important to embrace that.
But I also think from aninternal governance perspective
it's probably less critical, Iwould say, for small business,
because small business wouldgenerally transact in an ethical
and in a sustainable way.
Now I'm generalising because Iunderstand there's always
(17:14):
outliers, but certainly theemphasis on that topic
particularly is on the bigplayers and I think it filters
down to small business.
But it probably is not ascritical as it needs to be,
certainly not from a governanceperspective, because you don't
have any reporting obligationsin that sense.
Speaker 1 (17:32):
Do you think customers are looking for more
of an ethical and socialresponsibility approach from
small business, though?
Speaker 2 (17:38):
Yes, I do think that's certainly the case.
So how would you tie those twotogether?
That's a difficult topic, isn'tit so?
Speaker 1 (17:47):
And it's always a challenge, right, because
consumers want the world, butoften aren't necessarily ready
to pay for it.
Speaker 2 (17:53):
Yeah, that's right and I guess it goes back to like
from a small businessgovernance perspective it goes
back to your risk appetite isare you wanting to display that
you're ethical or that you'resustainable?
Is that something of the keymessaging that you want to send
to your customers?
If that's important to yourclient base and you know that's
(18:15):
important to your client baseweave that into your customers.
If that's important to yourclient base and you know that's
important to your client baseweave that into your policies.
Weave that into how you wantyour staff to message your firm,
and I guess that's whatultimately, it comes back down
to governance of policies andhow you want your staff to
interact to really show your endclient that this is what you
(18:37):
stand for as a business.
Speaker 1 (18:40):
Now there's a number of small businesses here in
Canberra who transact regularlywith the federal, government or
government agencies and oftenthey're required to demonstrate
their corporate socialresponsibility and environmental
practices as part of a tenderprocess or making a sale into
(19:00):
government.
I hear grumbles sometimes aboutthe compliance associated with
that and how complicated andcumbersome it can be to pull
paperwork together.
Is that something that you'veexperienced?
Speaker 2 (19:12):
Yes.
So absolutely Pulling togetherRFQs responses for government
can be a significant overhead,so certainly in people people in
this town would be wellfamiliar with how to respond to
those.
In my experience in terms ofthose corporate responsibilities
(19:33):
, certainly charter tech was asmall business or a smaller
business entity.
I didn't find that we had todwell on that topic so much we
had to cover it off, butcertainly it wasn't a key
component.
It was more about aroundworkplace gender equality
reporting and whether we werecompliant with that, and
(19:56):
sometimes we had to weave in ourpolicies around certain topics.
So it was important just tomake sure that that was all up
to date as well.
So indigenous procurement wasone of those topics that came up
regularly.
So yes, it's certainlycumbersome to respond to some of
those.
Should it put small businessoff?
(20:17):
No, I think there are certainlya lot of resources out there on
websites such as the CanberraBusiness Chamber, but also
holistically in business inCanberra, where you can find
information to support thoseresponses.
Speaker 1 (20:30):
And some of that does point perhaps to a need to
document some of your processesup front.
Do you think that's a fairobservation?
Speaker 2 (20:39):
Yeah, absolutely.
Look, I'm firmly of the opinionthat if you set the groundwork
at the beginning, if you knowyou want to transact with
federal government, these aresome of the things that you want
to consider at the beginning,because if you do tick over that
threshold or you do come acrossa question which you need to
answer, you have at the ready aresponse, and I'm sure a lot of
(21:03):
your listeners will be awarethat some of those responses to
government have a tightturnaround.
So the last thing you want tobe doing is pulling together
baseline governance policies anddocuments to support tender
responses.
That's not best practice.
I wouldn't advise it absolutelynow, steph.
Speaker 1 (21:21):
Small business obviously is not for the
faint-hearted.
There's a lot of responsibilitythat comes with running a
business.
You've got to generate a returnfor your shareholders yourself
in many cases.
You've got to look after yourpeople.
You've got to look after yourcustomers.
Have you got any final sort ofgovernance-related advice that
you'd like to offer ourlisteners?
Speaker 2 (21:40):
Certainly I think it's the main thing is set clear
goals for what you want toachieve.
I think it's really importantto ensure that your team are all
pushing for the same goal, andthe best way that you can do
that is to communicate thateffectively to your team through
(22:01):
various policies, throughvarious role descriptions,
through you know what your riskappetite is, how you want to
transact with your clients andall of that sort of thing.
So it's really important tomake sure that, as a business
owner whether you do it in aformalised paper-based suite of
(22:25):
policies and processes andprocedures, or whether you do
that by regular emails or teamcatch-ups it's just really
important to communicate what itis that you're effectively
pushing for as a business owner.
Speaker 1 (22:37):
Some good advice there, Stephanie Bates from KPMG
Enterprise Advisory.
Thank you so much for joiningme here on the Canberra Business
Podcast today.
Speaker 2 (22:49):
Thank you so much for having me.
Speaker 1 (22:50):
It's been great having you on, steph, and don't
forget that you can check outfuture and past editions of the
Canberra Business Podcast byfollowing us on your favourite
podcast platform.
This podcast has been broughtto you by the Canberra Business
Chamber with the support of CareSuper, an industry super fund
with competitive fees andreturns, exceptional service and
a focus on real care.
We'll catch you next time onthe Canberra Business Podcast.
(23:12):
Thank you, bye, bye.
Hello and welcome to the Canberra Business Podcast.
I'm Greg Harford from theCanberra Business Chamber and
I'm joined today by StephanieBates, who's the Operations
Manager for KPMG EnterpriseAdvisory, the Director of the
Canberra Business Chamber andformerly the Head of Corporate
Services for CharterTech Steph.
Welcome to the podcast.
Speaker 2 (00:25):
Thank you, so pleased to be here.
Speaker 1 (00:27):
Now you're really passionate about small business
and especially small businessgovernance, which sounds a bit
scary for many people.
But tell me, for small business, what does governance mean?
Speaker 2 (00:40):
Yeah, absolutely.
Look, governance is one ofthose big words where people
kind of shy away and go, oh no,small business doesn't really
apply to me.
But in my view, businessgovernance especially for SMEs
or small business is really justsetting some guidelines around
how you want your staff tointeract, having a few policies
and some basic how-tos in placeso that you can guide your staff
(01:03):
around how it is that you wantthem to behave in your
organisation.
Speaker 1 (01:08):
So yeah, so in a small business that's not having
a board that looks after thebusiness, it's just about having
policies, procedures andprocesses in place to make sure
everyone's doing what they needto do.
Speaker 2 (01:17):
Yes, absolutely so.
Definitely doesn't have to havea board, but certainly, for
example, if you have a financedelegation policy in place.
So as a business owner, as aCEO of a small business, you can
stipulate to your staff how itis that you want them to
transact with your vendors andat what point they need to
involve you, for instance, as anexample.
(01:39):
So at what?
Speaker 1 (01:40):
point.
Do you think small businessesneed to be thinking about
processes around governance,Because often a business will
start with a single person or acouple of people.
They get together, they form abusiness, they get going At some
point.
They're not the only ones inthe business.
When's the right time to bestarting to think about that?
Speaker 2 (02:03):
Look, I would say from the beginning, to be honest
, I would encourage anyone in asmall business to think a little
bit ahead for three to fiveyears and I know that sounds a
little bit daunting butcertainly laying the foundation
of how you want your staff tobehave, whether there are HR
policies that you require,whether you want to set up
(02:24):
regular meetings with yourdirectors on how you want to
discuss the business.
I think that's really importantto do from the very beginning.
But certainly, if you have avision to grow your business,
start as early as you can.
Speaker 1 (02:39):
It sounds like a lot of process, though.
How do you get started withthis if you're literally just
starting out?
Speaker 2 (02:47):
Yeah, look, I think that there's just some key
things to consider.
So, for example, a really goodplace to start is there's lots
of good resources available, andI would point people to the
AICD website.
They have some really goodguidance around small business
governance.
But probably what I would sayto anyone in small business is
(03:09):
have a look at the CanberraBusiness Chamber website as a
really good starting place.
There's a lot of resources thatyou and your team have collated
over the years and certainlyavailable on the website.
So an example of something thatyou might want to consider
looking at at the Canberrabusiness website is position
role descriptions for your team.
(03:30):
So why is that important?
Well, it's important to giveyour staff the understanding of
what it is you expect them intheir role.
It's important for when theyhave performance discussions and
also it's just important forthem to validate what it is
they're doing within yourbusiness day to day.
Speaker 1 (03:49):
Do you think there's a gap there?
Do lots of small businesses nothave job descriptions organised
?
Speaker 2 (03:55):
I mean I can't speak for all businesses, but
certainly the ones that I cansee and have been involved in.
I think position descriptionsare probably something that are
a bit of an afterthought in myopinion, and I think it helps to
have that established, becauseit sets clear boundaries on what
it is that you know person A isdoing versus what person B is
(04:17):
doing, and that's important toreally have a consolidated view
on the business and go forwardas a team.
Speaker 1 (04:25):
Now in small business , though, those job descriptions
at least at a practical levelare going to evolve quite
quickly over time.
If you've only got two or threeemployees in your business, you
don't necessarily have theluxury of being able to stick
with your job description.
How often do you need to comeback and review those?
Speaker 2 (04:44):
That's a really good question.
I would say come back andreview them on an annual basis.
So if you have a performancecycle that goes on an annual
basis, certainly have a look atwhat your position descriptions
look like.
And yes, I think probably for avery small business of two to
three, five staff, it'sdifficult to have position
descriptions that have reallyjust narrowing down on what that
(05:09):
person is doing.
And often what you find isbusiness owners do a lot to
support the business A to Z.
But what you're ultimatelytrying to facilitate is my
example earlier, the financialdelegations, for example.
Do you want two people to signthe bank to release payments,
for instance?
That will evolve over time asyour business grows.
(05:32):
You might want to set that up,you may not.
It just really depends.
Speaker 1 (05:37):
So let's talk a little bit about financial
oversight and, I guess, riskassessment.
What do you think smallbusinesses need to be doing in
that space?
How do they decide whether theyshould have one or two
signatures on the bank account?
Speaker 2 (05:51):
I think it comes back down to the owners of the
business assessing what theirrisk appetite is.
So it's not always practical tohave two people to say and
wholeheartedly agree it's reallyjust good governance.
From a good governanceperspective, you would have one
to load a transaction and oneone to release the transaction.
But it doesn't mean that youhave to have that in place.
(06:14):
So it's really just as abusiness owner does it make
sense to have that in place?
If it doesn't make sense, thendo what makes sense for you, but
have a process and communicatethat with staff.
I guess it's the ultimatemessage is are your staff aware
of what your expectation isaround your risk appetite and
around your financialdelegations and how it is that
(06:36):
you want them to transact?
If they understand and if it'sdocumented, I think that's
sufficient.
It doesn't have to be a formalpolicy, but certainly, certainly
it has to be communicated.
Speaker 1 (06:47):
But how do you communicate that if you're not
writing it down?
I mean, surely best practice isactually to have a written
policy that you can point to?
Speaker 2 (06:53):
Yeah, absolutely.
Best practice is always to haveit in a written document while
staff read it wholeheartedly.
That's always the question, butcertainly you can point back to
it.
I would probably say setregular meetings, set an agenda.
Set a fortnightly meeting, amonthly meeting with your staff
If you're the director or thebusiness owner.
(07:16):
Set aside a weekly discussionwith your business partner or
with your finance people just tounderstand the position of the
business.
Make sure you set that time indiary, because if it's not in
the diary it won't happen.
So it's really just what mediumis best to communicate with
your staff.
(07:36):
If your direction is by email,then pop it in an email.
If you don't want a formalpolicy and such.
Speaker 1 (07:43):
And in terms of getting people to pay attention
to the things that are said orthe policy, whether it's written
down or not, you make a goodpoint that not everyone reads
everything.
Have you sort of seen tips andtricks over the years to help
get messages out aroundgovernance, out to frontline
staff, for example?
Speaker 2 (08:04):
Yeah, I, um, I guess it depends on your industry.
I think, um, what I've seen workreally well is, um, some sort
of a morning stand-up, forinstance.
It doesn't work in everyindustry, but certainly if
you're working on a project thatyou're delivering, you might
have a think about having aweekly or a daily stand-up just
to communicate some of thosereally high levellevel things
(08:26):
that you want to draw out to dowith the project.
But you could also use it as aforum to raise any changes in
policy or anything that you wantthem to do differently.
That doesn't have to be daily,it doesn't have to be weekly, it
could just be a monthly thing.
And if you wanted to do anemail, an email would work too.
(08:48):
I would always encourageanything that you want to
formalise within your business,certainly to have in writing.
And what I've seen work verywell as well and this is
probably not so much in a small,small business, but bigger
business is have some sort ofacknowledgement from staff to
(09:08):
say, yes, I've read that and Iaccept that.
That's what I'll be adhering to.
Speaker 1 (09:13):
And that becomes an issue as you bring new people
into your business over time aswell.
Right, because it's all verywell briefing the team that
you've got in place now, but insix months' time, when your
business has grown and you'vebrought another four people into
the books, there's a wholebunch of new people that need to
be across the sameconversations yeah, absolutely.
Speaker 2 (09:31):
And look, I think that larger businesses obviously
have this in place very wellwhere they do onboarding
training, where you would wrapall of new staff into what your
key policies are.
A small business probablydoesn't so well, but it's.
It's a matter of then gettingyour team on board to ensure
that whoever comes on board isis well advised and educated
(09:53):
around what the key policies andand desires of the business
owner are in terms of handoverand all of that sort of thing
now, if you're running a smallbusiness, if you're a director
of a small business, youobviously take on a number of
responsibilities to shareholdersand you've got some statutory
responsibilities and obligationsas well.
Speaker 1 (10:15):
Do you think directors in small businesses
really understand those?
Speaker 2 (10:20):
I'm not sure that directors are fully across all
of the legislative requirements,and I would really encourage
people who are establishingbusiness for the first time to
really get a sense andunderstanding of what impacts
their particular business.
So, for example, what do I meanby that?
Um, things to be aware of iswhen do payroll tax obligations
(10:44):
kick in?
For example, um are you liablefor any particular statutory
reporting within your industry?
Do you have to report forworkplace gender equality
Generally in small business?
You probably don't, but it'sgood to have an understanding of
, if you don't, why you don'tand at what point does
(11:05):
thresholds kick in?
So I think another good exampleis casual employment.
Conversion, for instance, islegislated under the National
Employment Standards.
It's not applicable to convertcasual staff after 12 months in
an entity that has less than 15staff.
But if you're on that threshold, it's important to understand
that you are on the cusp and theconsequences of having casuals
(11:30):
employed in your organisation.
Speaker 1 (11:31):
As an example, and some of these obligations vary
from state to state andterritory to territory right.
So the rules that apply here inthe ACT are not necessarily the
same as those that apply acrossthe border or up in Queensland.
Speaker 2 (11:44):
Yeah, absolutely Certainly.
Payroll tax, for example, thethresholds are different in each
state.
So if you're in a smallbusiness entity and you are sort
of on the cusp of moving into adifferent state, I would
encourage small business ownersto leverage some of the
resources on the CanberraBusiness Chamber website, for
(12:07):
instance, or seek additionalsupport from external sources,
just to make sure that we'veticked all the boxes, because
obviously legislativerequirements are a little bit
different to just internalpolicies.
You have to adhere to those,and I guess the purpose of small
business governance is reallyto manage your legislative
requirements and also your risks.
(12:27):
So, as long as you haveeverything that you do in your
business with those two lensesin mind, that's probably a key.
Speaker 1 (12:36):
So what are the big things that we need to be
thinking about from a smallbusiness point of view?
You've got taxation the ATO isthe source of truth there but
you've got payroll tax.
You've got workers'compensation and health and
safety issues.
What are the other things thatsmall businesses should be
thinking about?
Speaker 2 (12:57):
So I think really one of the things that we need to
think about here are, yes, thepayroll tax thresholds as they
come in your BAS workings andand your reporting obligations.
What I've found in my personalexperience is the treatment of
things like depreciation.
(13:17):
So, depending on the industrythat you're in, it really
changes as your revenue profilechanges.
So those are some of the keyconsiderations.
If you're transacting withdefence, you might have
thresholds that apply fordifferent member registrations
(13:38):
that you have to consider, suchas DISP.
Workplace gender equality kicksin at 100 headcount, so that's
probably not so applicable for asmall business entity.
Modern slavery is a hot topicat the moment.
I think that's something thatpeople have to report against,
but that's something that kicksin at a million revenue.
(14:01):
So, again, some of the thingsthat apply to larger businesses,
but certainly for smallbusiness, the payroll tax
components I think are critical.
Your BAS and your ATOobligations, workers'
compensation, as you mentioned,those are certainly the keys.
Speaker 1 (14:19):
Yeah, so that gets pretty confusing right.
All these different thresholdsand different definitions and I
know the Chamber and the broaderChamber network have been
campaigning for years for a bitmore standardisation across some
of these.
Do you think small businessesget confused about the different
rules that apply?
Speaker 2 (14:37):
Yeah, I think absolutely.
It certainly is confusingbecause if you're looking at
just even workers' compensation,that range changes how it's
applied, different thresholds.
Some states will lump all ofyour actual turnover and all of
your actual salary costs tocalculate your premium, whereas
(15:01):
others will exclude it.
So it's extremely difficult tonavigate as a small business, I
think.
Speaker 1 (15:10):
What about ethics?
You know most of the smallbusiness, in fact, all the small
business people I talk to arekeen to do the right thing.
Broadly, how important do youthink it is that people are
embracing an ethical approach tosmall business?
Speaker 2 (15:25):
Well, as a chartered accountant, I would say it's
critical to your business, but Iwould say that, as a chartered
accountant, I would say it'scritical to your business, but I
would say that as a ca.
So look, I think ethics is oneof those things is, if you're
transacting with people in theeconomy, you are building trust,
and trust is the ultimatefoundation for anything that you
do, and the ethical foundationthen becomes trust.
(15:49):
So, to build your business, ifyou don't have the trust and
you're not working in an ethicalway, then absolutely you have
to come back to that groundworkof having your internal
governance, of teaching yourteam how you want them to
interact with your clients, howyou want them to interact with
your suppliers and all of thatsort of thing.
(16:12):
So I think it's absolutelycritical, especially for small
business, where your name as adirector is linked directly to
the services or the productsthat you provide.
So I guess if you take it backto that level, it's ultimately
your name, not your businessname, that you're selling as a
small business, and I thinkthat's critical to really take
that lens for ethics especially.
Speaker 1 (16:35):
In moving from perhaps an ethical approach to
one that's a bit more leadingedge corporate social
responsibility.
Again, most business people Italk to want to do the right
thing for the planet and fortheir people and everything else
.
Do you see that as being reallyimportant for small business to
embrace?
Speaker 2 (16:53):
I think it's important to embrace that.
But I also think from aninternal governance perspective
it's probably less critical, Iwould say, for small business,
because small business wouldgenerally transact in an ethical
and in a sustainable way.
Now I'm generalising because Iunderstand there's always
(17:14):
outliers, but certainly theemphasis on that topic
particularly is on the bigplayers and I think it filters
down to small business.
But it probably is not ascritical as it needs to be,
certainly not from a governanceperspective, because you don't
have any reporting obligationsin that sense.
Speaker 1 (17:32):
Do you think customers are looking for more
of an ethical and socialresponsibility approach from
small business, though?
Speaker 2 (17:38):
Yes, I do think that's certainly the case.
So how would you tie those twotogether?
That's a difficult topic, isn'tit so?
Speaker 1 (17:47):
And it's always a challenge, right, because
consumers want the world, butoften aren't necessarily ready
to pay for it.
Speaker 2 (17:53):
Yeah, that's right and I guess it goes back to like
from a small businessgovernance perspective it goes
back to your risk appetite isare you wanting to display that
you're ethical or that you'resustainable?
Is that something of the keymessaging that you want to send
to your customers?
If that's important to yourclient base and you know that's
(18:15):
important to your client baseweave that into your customers.
If that's important to yourclient base and you know that's
important to your client baseweave that into your policies.
Weave that into how you wantyour staff to message your firm,
and I guess that's whatultimately, it comes back down
to governance of policies andhow you want your staff to
interact to really show your endclient that this is what you
(18:37):
stand for as a business.
Speaker 1 (18:40):
Now there's a number of small businesses here in
Canberra who transact regularlywith the federal, government or
government agencies and oftenthey're required to demonstrate
their corporate socialresponsibility and environmental
practices as part of a tenderprocess or making a sale into
(19:00):
government.
I hear grumbles sometimes aboutthe compliance associated with
that and how complicated andcumbersome it can be to pull
paperwork together.
Is that something that you'veexperienced?
Speaker 2 (19:12):
Yes.
So absolutely Pulling togetherRFQs responses for government
can be a significant overhead,so certainly in people people in
this town would be wellfamiliar with how to respond to
those.
In my experience in terms ofthose corporate responsibilities
(19:33):
, certainly charter tech was asmall business or a smaller
business entity.
I didn't find that we had todwell on that topic so much we
had to cover it off, butcertainly it wasn't a key
component.
It was more about aroundworkplace gender equality
reporting and whether we werecompliant with that, and
(19:56):
sometimes we had to weave in ourpolicies around certain topics.
So it was important just tomake sure that that was all up
to date as well.
So indigenous procurement wasone of those topics that came up
regularly.
So yes, it's certainlycumbersome to respond to some of
those.
Should it put small businessoff?
(20:17):
No, I think there are certainlya lot of resources out there on
websites such as the CanberraBusiness Chamber, but also
holistically in business inCanberra, where you can find
information to support thoseresponses.
Speaker 1 (20:30):
And some of that does point perhaps to a need to
document some of your processesup front.
Do you think that's a fairobservation?
Speaker 2 (20:39):
Yeah, absolutely.
Look, I'm firmly of the opinionthat if you set the groundwork
at the beginning, if you knowyou want to transact with
federal government, these aresome of the things that you want
to consider at the beginning,because if you do tick over that
threshold or you do come acrossa question which you need to
answer, you have at the ready aresponse, and I'm sure a lot of
(21:03):
your listeners will be awarethat some of those responses to
government have a tightturnaround.
So the last thing you want tobe doing is pulling together
baseline governance policies anddocuments to support tender
responses.
That's not best practice.
I wouldn't advise it absolutelynow, steph.
Speaker 1 (21:21):
Small business obviously is not for the
faint-hearted.
There's a lot of responsibilitythat comes with running a
business.
You've got to generate a returnfor your shareholders yourself
in many cases.
You've got to look after yourpeople.
You've got to look after yourcustomers.
Have you got any final sort ofgovernance-related advice that
you'd like to offer ourlisteners?
Speaker 2 (21:40):
Certainly I think it's the main thing is set clear
goals for what you want toachieve.
I think it's really importantto ensure that your team are all
pushing for the same goal, andthe best way that you can do
that is to communicate thateffectively to your team through
(22:01):
various policies, throughvarious role descriptions,
through you know what your riskappetite is, how you want to
transact with your clients andall of that sort of thing.
So it's really important tomake sure that, as a business
owner whether you do it in aformalised paper-based suite of
(22:25):
policies and processes andprocedures, or whether you do
that by regular emails or teamcatch-ups it's just really
important to communicate what itis that you're effectively
pushing for as a business owner.
Speaker 1 (22:37):
Some good advice there, Stephanie Bates from KPMG
Enterprise Advisory.
Thank you so much for joiningme here on the Canberra Business
Podcast today.
Speaker 2 (22:49):
Thank you so much for having me.
Speaker 1 (22:50):
It's been great having you on, steph, and don't
forget that you can check outfuture and past editions of the
Canberra Business Podcast byfollowing us on your favourite
podcast platform.
This podcast has been broughtto you by the Canberra Business
Chamber with the support of CareSuper, an industry super fund
with competitive fees andreturns, exceptional service and
a focus on real care.
We'll catch you next time onthe Canberra Business Podcast.
(23:12):
Thank you, bye, bye.
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