This newsletter is about whether your board
is effective. Some of you may have been
involved with multiple boards over the course of your career, but some reading
this may be working with their first board or may not even have a board of
directors or advisors for their business (I’ll use directors and advisors
interchangeably for purposes of this discussion).
Let me share with you my view of the characteristic
of both good and bad boards.
Good
· Consist
of people with subject matter expertise who bring additional and broad perspective
to the company
· Ask
thought provoking questions about the strategy of the business and seek to
understand why certain paths are being recommended over others
· Bring
strategic relationships to the table
· Challenge
management thinking in an effort to be helpful
· Independently
verify information about the business and industry
· Dot
the legal i’s and cross the legal t’s but have a broader purpose
Bad
· Bring
limited outside perspective and do not fully understand the company operations
· Either
ask no questions at all or turn the board meeting into a detailed operational
review
· Rely
solely on management as a source for information about the company
· Offer
little in terms of relationship building to the company and industry
· Are
such good friends with the CEO that they will not challenge him or her and
exist merely to ratify decisions
· Focus
on the procedural and meeting the minimum legal requirements of their
responsibilities
While I rarely serve as a member of the board
for my client companies, I am almost always in attendance at meetings. Over the years, I have attended countless
board meetings and recently attended one of the best.
A good board can help management guide and
transform a company while a bad board can sit idly by and watch a company fail
(and in fact, hasten that failure). I
have personally seen both.
If you do not have a board, I would encourage you to start to build one. Over the life of your company, it could add tremendous strategic value and could be the key difference between success and failure if times get tough. If you have an effective board, embrace it and leverage it to the best of your abilities. Finally, if you have an ineffective board, deliver a wake-up call. Tell members what you expect and start to replace those who do not deliver.
If
your business could benefit from fractional CFO services, I would welcome the
chance to speak with you. Please give me
a call at (314) 863-6637 or send an email to For more information, visit www.homza.com
your cash is flowing. know where.®
Ken Homza
Copyright @ 2014 Homza Consulting, Inc.
