The sole director: efficiency today, vulnerability tomorrow
Four years after the introduction of the Companies and Associations Code (CAC), a quiet but fundamental shift is taking place in the Belgian business landscape. More and more companies are opting for a sole director. What started as a welcome flexibility for small enterprises now sows the seeds of governance challenges as the company grows. According to a recent GUBERNA study, based on a large-scale analysis of Belgian SRLs and SAs up to the end of 2023, nearly one in five large SRLs still operates with a sole director. Even in SAs, where collegial boards were traditionally the norm, the sole director model is gaining ground. Legally, this is perfectly allowed. In terms of good governance, it is more complicated.
Speed is not a strategy
The appeal of a sole director is understandable. Decisions are made faster, responsibilities are clear, and the model fits entrepreneurial spirit in the early growth phase. In start-ups and young companies, this simplicity can be an advantage.
But simplicity does not guarantee robustness, and speed is not a strategy. Companies rarely remain small or simple. They grow, internationalize, attract external capital, or face stricter regulation. At that point, management goes beyond operations and evolves into a strategic exercise. Sticking to a sole director then increases vulnerability rather than agility.
Complexity requires checks and balances
The data reveal notable sectoral differences. Service sectors more often choose small boards or a sole director. In more complex sectors such as banking, insurance, or infrastructure, the opposite is observed: larger boards and more specialized governance structures. It is a matter of common sense. Complexity requires diversity of perspectives, specialized expertise, and organized — genuine — checks and balances. These elements disappear when all power and responsibility are concentrated in one person. The risks are well known: blind spots in operations, weaker risk management, reduced strategic reflection, and greater dependence on a single individual. What appears efficient today can become a structural Achilles’ heel tomorrow.
Good governance as a lever
The persistent belief that governance hampers entrepreneurship is unfounded. On the contrary, both international and Belgian studies show that strong governance is associated with better performance, lower capital costs, and higher valuations. Investors pay a premium for professional oversight, transparency, and balanced decision-making.
Even in family businesses, governance plays a crucial role, especially during generational transitions or changing shareholder structures. Delaying decisions often means acting too late. Governance here is a foundation, not a fire extinguisher.
Legal freedom is not a free pass
The CAC rightly offers companies more flexibility. The possibility of a sole director was intended to allow a smooth start, not as a permanent endpoint. Yet many growing companies fail to adapt their governance structure as their scale and complexity increase.
The solution does not immediately require a full board with all legal obligations. An advisory board can be a first, accessible step. Advisors do not make decisions but bring external expertise, strategic reflection, and necessary checks and balances. This is a sign of maturity, not weakness.
The real question
The debate is therefore not about whether a sole director is allowed — that question is already legally answered. The relevant question is when it is time to share that role. Companies that treat good governance as a strategic tool build sustainable value. Efficiency is attractive. Resilience is essential.
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