Why corporate governance is something every entrepreneur should start thinking about?

I remember one of my early conversations with a leading industrialist many years back on company building. We spoke about building a company as building an institution. Something that you own as an entrepreneur but do not build for only yourself. You take into consideration the various other stakeholders that are invested in the venture i.e. your investor partners, employees, suppliers and many others, before yourself. As one reads about the many corporate governance lapses in the tech world today, one is reminded about these values of institution building vs corporation building when creating a world class organization.

As an entrepreneur it is easy to think about the company and yourself as one, given the sacrifices one makes to create the company and believe in it, especially during the times when no one else does. However, one of the most fundamental qualities of a good entrepreneur is one who can distinguish between his role in the company vs the company itself. One of the most important things for an entrepreneur to accept is that no organization is built by one person. There is a team of people behind. It includes early stage investors, the people who have believed in its vision and decided to work with it, the ones who have built alliances with it and the customers who have decided to trust the brand and buy its products or services. So anything that impacts the company impacts all of these stakeholders.

At the end an entrepreneur becomes a custodian rather than an owner of the company. And being a custodian means putting the company first in all of your decisions. While this is one of the most fundamental principles of good corporate governance, the allure of being a recognized leader can sway even the brightest to forget this and focus more of how they can keep the illusion alive than how they can build a lasting organization. So, as you are building your venture, do start building the culture of good corporate governance early on, because while you can change a lot of things in the company, changing the culture of any organization later on is one of the hardest things to do.

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