The Mainzeal collapse - lesson for directors #2: Have you got your house in order?

Mainzeal judgment brings lessons in corporate governance

One of the big criticisms of the judge of the Mainzeal directors was their lack of formal procedures. They didn't have a formal risk register nor, for the size of the company, a formal audit committee.

While you might not go to that extent in a small company, we do see many companies that don't realise what they are legally required to do as far as legal documentation goes. Failing to keep the right documentation could expose you to fines of up to $10,000.

Watch this space for updates as to the records a company is required to hold, or (if you'd like to know right now) email us and we'll send you a checklist.

Although Mainzeal chair Jenny Shipley and her fellow directors argued that millions of dollars of debt to Chinese parent company Richina Pacific was an asset on the books, it became increasingly unlikely that any money would be forthcoming from China. Photo: Getty Images