By: Hal London
Corporate governance is a powerful tool for boosting a company’s value and leaving a lasting legacy, yet many business owners need help to make the most of it. In his bestselling book, ‘Charged Governance: Transformative Corporate Governance Principles for Private Businesses,’ Andrew Usuki breaks down this complex topic into practical, easy-to-understand insights that can help private businesses elevate their performance.
Usuki’s experience as an investment banker, manufacturing executive, shareholder, and investor gives him unique insights into the five key groups every business leader should focus on: shareholders, directors, employees, customers, and suppliers, creditors and acquirers, and legacy founders. His approach stands out by focusing on helping founders tackle their personal challenges while adopting effective governance practices that reduce stress and drive success. We recently had the chance to chat with Usuki about his take on corporate governance, what inspired him to write his book, and what he’s planning next.
Your book recently became a bestseller. What was that like for you on a personal and professional level?
Writing is difficult. It challenges the author in personal ways. But the satisfaction I felt after working through discomfort and emerging from the completed process was astounding. I’m encouraged that my first book was received positively. Professionally, it is rewarding that the book, informed by various parts of my career so far, can help individuals on a broad scale.
How do you define private business corporate governance?
The primary goal is long-term shareholder value creation. However, the means to this end should be carefully calibrated with checks and balances and business laws. Also, exercising corporate democracy between owners and decision-makers is fundamental to corporate governance for private businesses.
Checks and balances are essential because building a business in a vacuum where some questionable decisions are often justified as part of shareholder maximization can create catastrophic, unintended consequences. There are many areas requiring legal adherence. For example, director fiduciary duties, business relationships with others, the safety and dignity of your employees, and how you manage your business ecosystem (i.e., suppliers, customers, lenders, and communities) are examples of areas within the frame of corporate governance for private businesses.
What are some triggers that cause founders of a private business to strengthen their corporate governance?
Tension is building about money in the business with another shareholder with whom you have a deep personal relationship. Or you’re considering selling, retiring, or raising equity capital from an institutional firm to help take your business to a new level. However, you’re still deciding whether to deal with an institutional partner.
Consider creating a board. Or, you may currently serve as a director on your board and are unclear about developing board objectives, the boundaries of your director’s fiduciary duties, and the associated liability as board decisions grow increasingly complicated.
As your business expands, you may feel fatigued by the constant need to build good business relationships with employees, customers, and suppliers and the trade-offs required to keep things balanced. This is especially important when you serve in multiple, potentially conflicting business roles: shareholder, director, corporate officer, executive, employee, etc.
You might be considering taking on new debt or making business decisions that conflict with your creditors, which in turn causes you angst. Also, perhaps the thought of acquirers swarming around you in the marketplace creates unease, as you’re not prepared to sell or engage with these seemingly adversarial parties. As the years pass, consider legacy and whether it meets your expectations.
What are some early symptoms that a trigger to act is lurking around the corner?
Feeling worried. This worry can be about revenue decline, a weak valuation, the absence of a lasting business legacy, and potential legal liability—to name a few.
Acute tension with others. Here, misaligned business relationships with people whom you personally care deeply about—like fellow shareholders—is common. Tension with fellow directors who are not providing value-enhancing direction and/or are unclear of their fiduciary duties. Or, confusion on what proper oversight means for your business. Also, unease around what behaviors are and are not appropriate related to dignity issues has lately become very common.
Burn-out. This can occur when there is an over-reliance on the founder, key decision makers are wearing too many hats, or there’s confusion about the braided responsibilities when an individual serves in multiple, potentially conflicting roles (ie. shareholder, director, corporate officer, executive, employee etc.). It is never too soon to take action to build sound corporate governance once these symptoms appear.
When you finished writing ‘Charged Governance: Transformative Corporate Governance Principles for Private Businesses’ how did you celebrate?
A handful of special individuals rooted for me to complete the book. They helped ground me when I faced adversity while writing. When finished, I celebrated by spending quality time savoring those relationships.
‘Charged Governance: Transformative Corporate Governance Principles for Private Businesses’ is available on Amazon.
Published By: Aize Perez
