Governance Isn't Optional: What The Works' Boardroom Fight Teaches Growing Firms

A public boardroom row at a discount retailer might seem like distant news if you're running a scaling business. It isn't. The Works is currently locked in a dispute that every growing firm should watch closely — not because of the retail specifics, but because of what it reveals about governance under pressure.

At the same time, the FCA has just expanded its support for fast-growing firms, explicitly linking early investment in governance to sustainable growth. Put these two stories side by side and the message is blunt: governance isn't a compliance afterthought. It's operational infrastructure.

The Works: A Governance Fight in Public View

Kelso, an activist investor in The Works, is pushing to install retired private equity partner Graeme Coulthard onto the AIM-listed retailer's board. The Works has pushed back hard, telling shareholders the move would undermine its growth plans.

Kelso has hit back at what it calls "absurd" claims, rejecting the retailer's framing entirely.

Strip away the personalities and this is a familiar pattern:

A shareholder wants greater board representation and oversight.
Management resists, arguing the intervention threatens strategic momentum.
Both sides fight the battle publicly, through shareholder letters and press statements.

Whoever is right on the substance, the dispute itself is a symptom. Boardroom fights like this rarely erupt overnight. They build up when governance structures haven't kept pace with a company's growth, its shareholder base, or its risk profile.

Why This Matters Beyond Retail

Growing firms often treat governance as something to formalise "later" — once they're bigger, once they've raised the next round, once there's time.

That's backwards.

The FCA's own data supports this. Its Scale-up Unit has just welcomed five new firms — ClearScore, Modulr, Teya, Urban Jungle and Zilch — offering tailored regulatory support as they scale. These are the first solely FCA-regulated firms to join the programme, spanning payments, consumer finance, credit information and insurtech.

The regulator didn't add this support as a courtesy. It added it because of what it learned from a pilot involving 15 high-growth firms across asset management, wealth management and payments. The finding was consistent: early investment in governance, risk management and controls is what allows firms to manage growth without being derailed by it.

Jessica Rusu, the FCA's chief data, information and innovation officer, put it plainly: the goal is to help ambitious firms "navigate regulation and innovate with confidence." Confidence, in this context, doesn't come from ambition alone. It comes from structure.

Three Governance Failures That Show Up Later

Based on what both the FCA's findings and situations like The Works' dispute reveal, the same governance gaps tend to resurface across growing companies:

Board composition lags behind company complexity. A board built for an early-stage business often isn't equipped for the scrutiny that comes with a larger shareholder base or public listing.
Risk oversight is reactive, not built-in. Firms tend to build controls after a problem appears, rather than as part of normal growth planning.
Shareholder communication is treated as PR, not governance. When disputes go public, it's often because internal channels for disagreement broke down long before the press release stage.

None of this is exotic. It's basic infrastructure — the kind that's boring until it's missing.

What Scaling Firms Should Actually Do

The FCA's Scale-up Unit sits alongside its other support programmes — Innovation Pathways, the Pre-Application Support Service (PASS), and its Early and High Growth Oversight function — creating what the regulator describes as a "clear pathway from start-up to scale-up." Since launching its innovation services, the FCA has supported more than 1,000 growing firms.

The practical lesson for any scaling business, regulated or not:

Build governance before you need it. Waiting for a crisis to formalise board structure or risk controls means you're designing under pressure, not by choice.
Treat board seats as functional, not symbolic. A board member should add oversight capability relevant to your current stage — not just represent goodwill from an earlier funding round.
Don't confuse resistance to oversight with strategic protection. The Works' argument that added board scrutiny threatens growth plans is the kind of claim regulators and investors increasingly question. Growth and governance aren't opposites.

The Uncomfortable Truth

Public boardroom disputes are expensive, distracting, and damaging to reputation — regardless of who wins. They also tend to confirm what was already true internally: governance had fallen behind growth.

The FCA is now actively incentivising firms to close that gap early, through structured support rather than after-the-fact enforcement. That's a signal worth taking seriously, whether or not you're FCA-regulated.

Growth without governance isn't ambition. It's exposure.

Key takeaways

Governance disputes are rarely sudden — they surface when board structures haven't kept pace with company growth.
The FCA's Scale-up Unit now supports firms like ClearScore, Modulr, Teya, Urban Jungle and Zilch, reflecting a broader regulatory push toward early governance investment.
FCA pilot findings confirm that firms with strong governance, risk management and controls scale more sustainably.
Treat board composition and risk oversight as operational necessities, not administrative tasks to defer.
Public boardroom conflicts, like the one at The Works, are a warning sign for any growing business — not just a retail story.