The Tangible and Intangible Value a Board of Advisors The When, Where, When, How & Why of Board of Advisors
RESOURCES ON THE ISSUE https://www.forbes.com/sites/ groupthink/2013/10/16/howto-build-your-board-ofadvisors-a-3-step-approach/
REASONS WHY YOU NEED A BOARD You keep doing the same things expecting different results. You need people who will open and honestly challenge you to do your best. You see industry changes happing and need to ready the company and yourself for the change. You are experiencing large growth and there are too many opportunities for you to process. There are differing opinions in leadership that keep repeating themselves and never resolve. There was a sudden change in leadership that was unexpected. Your identified successor is not performing as you expected. There is another business owner who wants to purchase you.
Our View of The Role of The Board An effective Board of Advisors challenges the owner/s to have conversations that the owner has been avoiding. The structure of a board helps create relationships that allow for trust and constructive advice. A board will hold the owners accountable for their business and personal goals.
WHY NEED A BOARD OF DIRECTORS? Characteristics FIDUCIARY DUTY CEO PRESENTS IDEAS FOR APPROVAL INCREASED LEVEL OF INVOLVEMENT LARGER FINANCIAL COMMITMENT LEGALLY CONTROLLED INSURANCE NEEDS Who has them? COMPANIES WITH LARGER PROFIT COMPANY HAS OVER FIFTY EMPLOYEES THE BUSINESS IS PREPARING FOR LEADERSHIP TRANSFER BUSINESS IS TRANSITIONING IN MARKETS CEO IS LOOSING FOCUS OR HAS HIT A PLATEAU OWNERSHIP IS MOVING TO PASSIVE OWNERS
Advisory Boards IT IS IT IS NOT OUTSIDE ADVISORS SUPPLEMENTAL EXPERIENCE SMALL IN NUMBER PAID POSITION STRATEGICALLY SELECTED FOR IDENTIFIED TRANSITION EXPERIENCE CONFLICT RESOLUTION ADVICE ONLY A PLACE FOR YOUR PAID ADVISORS CONTROL OVER THE COMPANY PERMANENT APPOINTMENTS SUBSTITUTE FOR YOUR LEADERSHIP NO DOUBLE DEALING HERE EITHER
Prepare Before Creating Why do you want a board? What experience do you need board members to have? What is your industry profile? What is your strategic profile? What are the keys to future success? What will be your main sources of future growth? How will future leadership/management or lack there of effect the company s growth? Do key management feel comfortable with conflict and how do they handle it?
Who Do You Want? Where have they worked and how does her experience fit with your needs? Reputation, time to commit, confidentiality and discretion. Connections in the area you need for growth and knowledge of opportunities. Consider generational perspectives. Members who have served on other boards for assistance in running and management for the owners.
What is the Structure? How many do you need? This varies on size of the company and need for expertise. Recommend small no larger than seven ideally four to five. 1 Will you have term limits. Remember members may become obsolete due to changes in the company. If there are terms, ideally it should be at least two years. 2 Who sits on the board? Owners? Family members? Share holders? 3 Can you ease your way into a board?
How Long Does This Take?
More Decisions How many meetings? How much do you pay them? This Photo by Unknown Author is licensed under CC BY This Photo by Unknown Author is licensed under CC BY-SA
Now You Want a Board Of Advisors- Where are These Amazing People and Who Will Serve? Industry Specific Experience Specific This Photo by Unknown Author is licensed under CC BY-ND This Photo by Unknown Author is licensed under CC BY
Who Do You Leave Out? Your banker Your lawyer Your accountant Your financial planner Your insurance specialist Direct competitors Friends Those who are too overly committed.
Where Do You Find Members to Serve??are these people? Get referrals from those you trust. Professional associations- Peer groups Read your industry journals Work in your local business associations. Search firms
Diversity Changes Perspectives This Photo by Unknown Author is licensed under CC BY-NC-SA
What Support Does Your Management Need?
Every Meeting Should Have An Agenda Map the usage of your board. Bring in key management for the board to get to know. Introduce the concept and use of the board in management development. The meetings should be use to vet growth ideas, give a forum for gathering of information and intellectual sharing of experience and expertise of your board members. Prepare your board members.
Mission Statement- History Who s Who of the Company Competitors, Vendors, Customers Biographies of Key Players and Their Role Financial Information Recent Valuations, Budgets, Articles, Bylaws- Operating Agreements First Meeting Should Educate Your Board
Education Continued- 1 2 3 Industry Education Diagram of Business Influencers S.W.O.T.
To Take Notes or To Not??? This Photo by Unknown Author is licensed under CC BY-ND
Facilitation This Photo by Unknown Author is licensed under CC BY
Vulnerability of Owner and Key Management This Photo by Unknown Author is licensed under CC BY-SA
Family Businesse s Are Special This Photo by Unknown Author is licensed under CC BY-SA
Boards Should Help You Anticipate Changes and Plan for It. This Photo by Unknown Author is licensed under CC BY-SA
Remember Growth Comes With Growing Pains This Photo by Unknown Author is licensed under CC BY-NC-ND
Family & Business Success, LLC Amy Wirtz, CEPA 5050 Waterford Dr. Sheffield Village, OH 44035 Phone: 440-695-0941 Email: amy@fabsuccess.biz Web: www.fasuccess.biz