Financial Decision Making for Optimal Performance
In Chapter 7, we discussed the numerous benefits associated with establishing a strong corporate governance regime. Two of the benefits included improved performance through greater efficiencies and optimizing the leveraging of nonfinancial contributions offered by the shareholders, some of whom will be new business partners serving decision-making roles. The primary means to secure such benefits is to manage financial decision-making processes and establish financial decision-making structures consistent with the performance imperative.
To achieve a successful exit, you must consistently and decisively make the right financial decisions on all levels. You must allocate judiciously the appropriate decision-making authority and responsibilities to ensure successful execution and sufficient accountability respectfully. Deem processes in any business as natural inefficiencies, and streamlining them should be a goal. Decision-making structures, particularly for an entrepreneurial venture, need to accommodate the periodic addition of new business partners who also serve as decision makers.
To examine the various critical elements related to establishing effective decision-making processes and structures, the chapter begins with a discussion of financial decision-making processes, which include employing sound corporate governance practices, managing financial expectations, and understanding the dynamics of your decision-making ...