In this video I’d like to share with you the reason why every company, be it Sole Trader, Partnership or Proprietary Limited should have their own board of directors; and its benefits to you as a business owners and its organisation.
The role of the board of directors in the company is to represent the shareholders’ interests in the ‘day to day’ affairs of the company. In major organisations, the diverse background of the board of members will provide a breadth and depth of experience in all areas of the business. Their position to advise the CEO and ensure that the company decisions are geared to its achieving certain strategic objectives. The decision taken should be intended to grow the company and to benefit the shareholders. But what if your company is owned by a few shareholders? Do you really need a board of directors then? What if your organisation is just made up by yourself and another partner? What if the company is only you?
The value of having a board is not only to keep you, the key decision maker accountable. It is also to provide you the opportunity to bounce ideas of people off different business experiences and backgrounds and expertise to gain ‘better insights’ into the challenges that your company faces.
As an entrepreneur, your success depends on your ability to make your business work and sticking to your principles even when the odds are against you. However, the stubbornness can also prove to be a great downfall of your business if you persevere with the bad decision. Therefore, having a ‘board of directors’ or a ‘sounding board’ can really add value to your business.
So how do you go about building your own board of directors or sounding board?
- Define It.
You have to define your own version of what a board of directors should consist of. It can consist of an individual person or a group of people with the breadth and depth of business experience that is different to yours. Utilising such a group of people to provide the strategic insight that you require in order for you to bounce ideas off and get the value in return so they can suggest something’s that you may have thought of. By defining your board of directors, their make up and type, it then brings you to the next step.
- Set your Criteria
Your board of directors should consist of people whom you trust and respect who have some form of business experience and who ideally should have ‘subject matter expertise’ that is different to yours. They should also consist of people of whom you could have a ‘spirited discussion’ with and yet even disagree with without feeling emotionally bad about it. The reason why I put this last point in is to clarify and to ensure that your board of directors’ function specifically as a ‘board of directors’ with minimal emotion involved so that adequate and proper business decisions can be made.
- Go and Find Them.
Once you have defined the type of board of directors that you would like and you have establish your criteria for that, that last thing you need to do is go and find them. Once you’ve found them, you need to approach them, you need to be prepared to offer them something of value in return to come on board with you to work on your business. If you understand the value that you can add to your business by surrounding yourself with people whom you respect, and are well-informed, either with your board of directors or even with the business consultant or advisor; then you owe it to your own success as a business owner to do just that. Doing otherwise will rob you of what you can achieve in the future.
If you like more information on how you can call about finding the right people, you can contact me or if you want to know more information about the challenges a rapidly growing company faces and what they can do to overcome them. You can download the preview of my book ‘$20k to $2 million in 2 years’ absolutely free by clicking here.