Starting 2021 offers a time to rethink and plan new ways to move your business forward.
Adding or enhancing your board of directors or mentor group could be part of this effort.
While a board is not for every company, it might be a helpful to consider the advantages to your company. If you already have a board, it could be time to rethink how the board is functioning, parameters and members current and needed experience.
Depending on your expectations and goals for this group, you might consider developing more of a mentor group. A mentor group could be more lax without bylaws but still prove to be helpful. A mentor group would need the same time, consideration and planning to make it helpful and beneficial to your company.
It is important to keep in mind that having a board is a commitment and an investment. As you and your company decide what is best for you, know what you want or need and how it fits with the other resources and capabilities of your business. Like anything else you have in your business, a board needs to be structured and staffed correctly to function efficiently.
What are the benefits of having a board?
- Boards establish a culture that surrounds management accountability. That is why they are in place. They should help establish accountability keeping management on task insisting on seeing progress toward defined goals.
- Members selected wisely offer highly regarded coaching, consulting and management aid that can prove invaluable.
- Boards are designed to fill critical areas that currently the company has no expertise in as well as fill any experience gaps. Board seats should be filled according to needs, not personalities. Keep in mind that chemistry is critical.
- The best board members will know the organization and the marketplace.
- Board members should challenge the organization’s thinking and provide recommendations on new and better ways to grow the business.
- While nothing is guaranteed or fail safe, boards can help increase the odds against your company making fatal mistakes.
- When needed, the board does offer the “I need board approval” card giving management time to ponder the decision as well as seek board input and approval.
- Boards can also offer company management a very rewarding experience as they help make rational, important direction decisions and give both the pros and cons to numerous issues.
If the following are your reasons for pursing the development, selection and use of a board, these are poor reasons and should be avoided.
- You simply want to say you have a board.
- You want to make yourself and your company look better by padding your ego.
- You want to check off some imaginary box that claims you need a board.
An important part of developing your board is establishing how you are going to manage your board, so they are effective and worthwhile for your company.
- Be consistent. Yes, we all need to be flexible. An important lesson learned from the Covid19 pandemic and the way it affected business. But as much as possible, be consistent with your goals for the board. Consistent in how you work with the board. And, consistent in how you communicate with the board.
- Be authentic and transparent. Holding key information or not being honest with your board will prove your board to be ineffective in helping you and your company. Once there is distrust, it is extremely hard to change the path back to a trust.
- Determine with the help of your board the best meeting schedule. Whether it’s monthly calls, quarterly deep dives, 1-2 times per year in person or whatever is best for your business. Take into account the issues that the business is and might face, this will help determine the best meeting schedule.
- Decide, define and communicate clearly the Issues you need guidance on.
- Prepare and distribute the information the board needs before any board meeting-preferably a week. Provide slides decks, schematics, visuals as needed
- Establish next steps, who is responsible and report back to the board on any issues discussed at the board meeting. The board and you should see progress.
- Stay on top of board staffing. As the business evolves and there are structure changes be prepared to make board staffing changes.
- With any business transaction conflicts can arise. Don’t run from the tension. Handle issues head on. Avoid the ones you can with proper planning.
- Define what you want from the board. Do you want the board to have more control or be more of a value-added partner. Let all board members knowtheir roles and your expectations upfront.
The basics of good board management is establishing a consistent operating plan and doing the advance work before a board meeting to focus yourself and the board members on the most important issues for the company. This includes ensuring they have all the information ahead of time to effectively engage in the conversation. These steps are important to build trust and gain the most advantages from having a board,
Guidelines for the board
- Define the issues that require Board Approval/Veto Rights ( what actionable control does the Board or certain Board Members possess)
- Board staffing needs change. Depending on how you initially selected board members as well as what your company needs over time.
- Set a plan for onboarding and offboarding board members.
- Set and vote on term limits and include them in the bylaws.
- Establish a policy that includes a minimum that board members are expected to contribute. This could include policies on board meeting attendance, contributing to board meeting discussion, adding items to the board agenda, participating in committee meetings, or other criteria.
Deciding to add a board or make changes to your current board is a decision that requires time and thought. And, having a board is a commitment and an investment.
When board members know what is expected of them, the board is on its’ way to being strong, effective and helpful to your organization. You want your board members to be a truly independent voice that works well within a team to make meet your organization’s best interests and the stakeholders the first priority.
