Do You Have a Board of Advisors?:
Traditionally, large [usually publicly traded] companies have a formal Board of Directors, defined by the company's by-laws. A multi-million dollar company utilizing funds invested by shareholders, who very likely are not involved in the daily operations, uses the experience and expertise of individuals to oversee the company's management team and insure profitability. The board members provide advice, counsel and a forum to deliberate the company's mission and the execution of its policies. It seems reasonable given this scenario that a board of directors is in order. What about small, privately and many times closely held companies? Is a board of directors only for the big guys? Hardly! Every business regardless of annual revenues, number of employees or years in existence needs outside counsel and perspective. Too often, small companies see their "board" as a requirement dictated by statute rather than as a powerful resource. As a result, many boards have two officers, the President and the Secretary, who meet once a year to fulfill the required annual meeting. What if business owners were to rethink the value and benefits of using the "board" model and redefined it to suit their particular situation. Enter a "board of advisors". A board of advisors for a small business resembles the more formal Board of Directors common with larger companies. In creating this group, the business owner takes advantage of the collective experience, expertise and points of view that carefully selected individuals would bring to the table. Assuming that this is an acceptable idea, how would the owner develop a board of advisors? In designing a board, that will positively impact the company's future, an owner would begin by categorizing all of the daily operations. Look at the major functions - sales, marketing, production/productivity, employees, innovations, etc. and decide what areas have the greatest weakness. Secondly, create a list of factors that are impacting the business specifically and the industry in general. With this information, an owner can now begin to identify advisors with expertise or experience in those areas. In addition to their specific skill sets, look for individuals who are: easy to talk with, capable of holding the owner accountable, really understand sound business practices, are ideally familiar with the owner's type of business and most importantly are committed to the future success of the business. If this is the first time a board of advisors has been assembled for the business consider having a board meeting every month for the first six months, until the owner and the board are well acquainted with the issues and the working relationships have been clearly defined. After the orientation period, the frequency of the meetings can be moved to a quarterly basis. While this may seem like a lot of meetings, keep in mind that the role of these advisors is to provide support, offer outside perspective, give advise or opinions and brainstorm issues. This must be a continuous process, not a once a year activity. ©2000-present Flight Unlimited - All Rights Reserved |
