Good governance for growing businesses isn’t about implementing frameworks or creating committee structures. It’s about adding just enough clarity to stay in control as complexity increases.
Most growing organisations approach governance backwards. They either resist it entirely – treating any structure as a step toward becoming corporate – or they overcorrect, importing governance models designed for organisations ten times their size.
Both approaches fail. The first leads to chaos as informal systems break down. The second creates overhead that slows everything down and feels disconnected from how the organisation actually works.
Growing up without losing your mind explores this tension in depth, but the core principle is simple: governance should make things clearer and easier, not harder and slower.
What governance actually means
Governance is how decisions get made and how you know they’re being made well. It’s the set of agreements about who can decide what, what information they need to decide it, and how you track whether those decisions were right.
For small organisations, this happens informally. Everyone knows who makes which decisions. Information flows naturally. You can see whether things are working because the whole organisation fits in your head.
As you grow, informal stops working. Not everyone has the same context anymore. Decisions that used to be obvious become ambiguous. You need more explicit agreements about how things work.
That’s governance. Not policy manuals or board papers. Just clarity about how decisions happen and how you stay in control.
Why governance feels threatening
Governance has a bad reputation in growing businesses, and for good reason. Everyone’s seen what happens when governance becomes the work instead of supporting the work.
Meetings that exist to prepare for other meetings. Approval processes that take longer than the work itself. Documentation requirements that serve no purpose anyone can articulate. Committees that meet regularly but make no decisions.
This is what bad governance looks like. It’s governance that’s been copied from somewhere else without thought, or governance that’s accumulated over time as successive responses to problems, creating layers of process that nobody’s willing to remove.
If that’s your reference point for governance, then yes – it should be avoided.
But that’s not what good governance is. Good governance removes friction. It clarifies who owns what. It makes decisions faster by removing ambiguity about who can make them. It creates confidence by making the organisation more predictable and controllable.
The threat isn’t governance. It’s bad governance.
The transition point
Most organisations hit a governance transition point somewhere between 15 and 50 people, depending on complexity. Before that point, informal governance works. After it, informal governance creates more problems than structure would.
The signal is usually decision-making that’s started to feel harder than it should be. Decisions take longer. People aren’t sure who should make them. The same discussions happen repeatedly because nothing’s written down. Work falls through gaps because ownership isn’t clear.
These aren’t signs of organisational failure. They’re signs that you’ve outgrown your current operating model. The informal agreements that worked when everyone shared context don’t work when context has fragmented.
You need more explicit structure. Not because structure is inherently good, but because the absence of it is now creating friction.
Why governance breaks when companies scale past “everyone knows” explains this breakdown in detail – how shared understanding fragments and why informal systems stop working at scale.
What minimum viable governance looks like
Good governance for a growing business is the minimum set of agreements needed to remove ambiguity about how things work.
This might include:
Decision rights: Who can make which types of decisions without escalating? Where do decisions need input from multiple people? What decisions need formal approval?
Ownership: Who owns which outcomes? Not just who does the work, but who’s responsible for ensuring it gets done and gets done well?
Information flow: What information needs to be captured? Where does it live? Who needs to see it?
Risk management: How do you identify and track significant risks? Who decides whether a risk is acceptable? What happens when risk appetite is unclear?
Review cycles: How often do you check whether your approach is still working? What triggers a review of a decision or a policy?
These don’t need to be complex. They need to be clear. Clear enough that when ambiguity arises, you have a way to resolve it without lengthy discussion about whose job something is or who has authority to decide.
When ownership becomes unclear – when “someone’s job” stops being a governance model – you need these explicit agreements to prevent work falling through gaps.
Scaling governance as you grow
Governance needs to scale with the organisation, but the scaling isn’t linear. You don’t add proportionally more governance as you add people. You add governance when you hit specific transition points.
Early growth (10-30 people): Make decision rights explicit. Clarify ownership. Start capturing key decisions and why they were made.
Mid growth (30-100 people): Add more structured risk identification. Create clearer processes for cross-team coordination. Build evidence that you can explain your approach to external parties.
Later growth (100+ people): Formalise governance structures. Add oversight mechanisms. Create systematic ways of ensuring controls are working.
The mistake is jumping straight to later-stage governance when you’re still in early growth. You end up with structure designed for problems you don’t have yet, creating overhead without value.
Start simple. Add complexity only when its absence is causing real problems.
The role of documentation
Documentation in governance serves two purposes: it creates clarity about how things work, and it creates evidence that you can share with external parties who need assurance.
The first purpose is more important than the second, but most organisations get this backwards. They document for compliance or for auditors, creating documents nobody reads and processes nobody follows.
Good documentation starts with usefulness. If you’re documenting decision rights, the document should be the thing people actually reference when there’s ambiguity. If you’re documenting risk decisions, the record should be useful for understanding what was decided and why, not just for showing that a decision occurred.
When documentation is useful internally, it’s usually also sufficient for external assurance. The inverse isn’t true – documentation created purely for external audiences rarely serves internal needs well.
Document what helps you run the organisation better. The external value will follow.
Governance isn’t paperwork – it’s how decisions survive scrutiny explores why decision logic matters more than documentation, and how to capture both effectively.
When to add structure
The right time to add governance structure is when its absence is creating friction, but before that friction has become a crisis.
You know you need more structure when:
Decisions are taking longer than they should because nobody’s clear who can make them
Work is falling through gaps because ownership is ambiguous
The same issues keep coming up because nothing’s written down
People are frustrated but can’t articulate what’s wrong
You’re turning down opportunities because you’re not confident you can deliver at that scale
These are signals, not failures. They tell you the organisation has reached a scale where your current operating model needs to evolve.
Respond early. Adding structure is easier before informal systems have completely broken down. If you wait until there’s a crisis, you’ll add more structure than you need, faster than you can absorb it.
What to avoid
Growing businesses make predictable mistakes with governance:
Copying what larger organisations do: Governance that works for a 500-person organisation probably doesn’t work for a 50-person organisation. Start with your actual needs, not with imported frameworks.
Adding structure everywhere at once: Add governance where it’s needed, not uniformly across the organisation. Some areas need more structure than others.
Creating governance that serves governance: Every piece of structure should serve a clear purpose. If you can’t articulate why it exists and what problem it solves, you probably don’t need it.
Optimising for external perception: Governance that looks impressive to outsiders but doesn’t help you make better decisions is performative, not functional.
Resisting all structure out of principle: Some founders treat any formalisation as a betrayal of culture. This often means they add structure later, under pressure, and get it wrong.
Governance and culture
One of the persistent myths is that governance and culture are opposed. That adding structure means losing what made you distinctive.
This is backwards. What kills culture isn’t structure – it’s confusion. When people don’t know who can make decisions, when ownership is unclear, when the same conversations happen repeatedly, that’s what creates frustration and erodes culture.
Good governance protects culture by creating clarity. It removes the overhead of constantly renegotiating how things work. It lets people focus on meaningful work instead of navigating ambiguity.
The organisations that maintain their identity through growth are the ones that add structure deliberately. They’re clear about what needs to be formalised and what should stay informal. They preserve space for the things that matter while creating clarity around the things that were causing friction.
You don’t become corporate by having clear decision rights. You become corporate by adding structure you don’t need, that serves no purpose you can articulate, that exists because it’s “what mature organisations do.”
Proportionate to risk and complexity
Governance should be proportionate. High-risk areas need more structure. Low-risk areas can stay informal longer. Complex coordination needs clearer processes. Simple, well-understood work doesn’t.
This means governance won’t be uniform across the organisation. Your approach to financial controls probably needs more structure than your approach to team meetings. Your risk management process probably needs more formality than your internal communication norms.
This feels inconsistent, but it’s actually right. Uniform governance treats all decisions and all risks as equivalent. They’re not. Match the level of structure to the level of risk and complexity.
Protects Risk Manager supports this by making it easy to apply different levels of rigour to different types of decisions. High-stakes risks get thorough treatment. Lower-stakes decisions stay lightweight. The governance adapts to the need.
Evidence as a byproduct
One sign that governance is working well is that evidence becomes a natural byproduct rather than a separate activity.
When you’re making decisions well and capturing the key information as you go, you naturally create a record that you can share with auditors, customers, investors, or partners who need assurance.
When governance is purely performative, evidence is created separately – usually right before someone asks for it. It’s reconstructed from memory, assembled from fragments, or invented to fill gaps. It doesn’t reflect how decisions actually happened because it wasn’t part of the process.
If you need to scramble to create evidence every time someone asks for it, that’s a signal that your governance isn’t producing useful records. The documentation exists for compliance, not for clarity.
Good governance produces evidence you’d want to keep anyway, because it makes the organisation easier to run.
Starting from where you are
If you’re a growing business that’s currently operating informally, you don’t need to implement comprehensive governance overnight. You need to identify the one or two places where lack of clarity is causing the most friction, and add just enough structure to remove that friction.
Maybe that’s clarifying decision rights for a particular type of decision. Maybe it’s being explicit about who owns which risks. Maybe it’s creating a lightweight way to track key decisions so you stop having the same conversation repeatedly.
Start small. See if it helps. If it does, add structure in the next area where friction is highest. If it doesn’t help, either you’ve added the wrong structure or you’ve added structure to solve a problem that wasn’t actually about governance.
The goal isn’t comprehensive governance. It’s better control with minimum overhead. Add structure only where it creates value.
What good looks like
You know governance is working when:
- Decisions happen faster because ambiguity is removed
- People are clearer about what they own and what authority they have
- External parties can get assurance without you having to scramble to create evidence
- The organisation feels more controllable as it grows, not less
- Structure serves the work instead of becoming the work
This doesn’t require sophisticated frameworks or extensive documentation. It requires clarity about how you make decisions, who owns what, and how you know whether things are working.
Good governance for growing businesses isn’t about becoming corporate. It’s about adding just enough structure to stay in control as complexity increases.
Start with what’s causing friction. Add the minimum structure needed to remove it. Build from there as you grow.
The goal is control without bureaucracy. Clarity without rigidity. Structure that serves the work, not structure that becomes the work.
