It can sometimes be a lonely place on your own at the helm of a new or growing company – having all that responsibility and all those decisions to make, and no-one to bounce ideas around with. Having a board of directors in place can provide a business owner with additional skills and valuable alternative perspectives, and also makes for good corporate governance — but the prospect of bringing others into your business can be daunting.
We look at a few simple tips to help you get a board on board:
Consider setting up an “advisory panel” as a first step, rather than appointing a formal board. These advisors can offer their thoughts on strategic issues and help you evaluate opportunities, but unlike an established board of directors, there is none of the formality of monthly meetings, minute taking, voting on resolutions, etc – and of course following their advice is completely discretionary. The panel need only comprise a couple of members, and its best to start with people you know – perhaps friends & acquaintances who are already successfully running their own business (you may want to reward them with lunch in return for their time!)
As you grow, consider establishing a more formal group with a defined remit– and this is where finding the right team is vital. As tempting as it may be to align yourself with people with whom you feel an obvious rapport, surrounding yourself with “yes-people” is not the aim of the game. A director who challenges your thinking and offer alternative views will be far more beneficial to your business.
Also give consideration to the attributes you are looking for – whilst it’s good to fill gaps in your skills base, do remember that a non-exec is not there for you to offload work onto. So a director with an IT background is not there to fix your server when it falls over, in the same way that a finance oriented advisor won’t fill in your tax return. They are there to advise on strategy, evaluate opportunities and generally provide a sounding board for your future plans. In this regard, its often just as helpful to have a generalist on board, rather than specialists i.e. someone who has been in business for years and who can legitimately offer a “gut feel” opinion on an opportunity, as well as interpreting a business case and a set of financials….and if you do need to bring in very specialist skills, you can always buy them in ad-hoc as consultancy services.
So how do you find suitable candidates? Trade shows, networking groups and business events are a good place to start – you are very likely to find that there are others in your position who would appreciate a reciprocal opinion themselves. Also speak to your accountant – we’ve linked up many business owners who we think could work collaboratively, and we also happily act as non-execs ourselves to clients where we feel we can add value.
Do also remember that the make-up of a board will change over time – the person you relied on for a wealth of start-up advice may not have the most appropriate pair of ears if you are looking to source significant funding, enter a new market, buy a competitor or divest of a troublesome major client or supplier. In the same way that you evaluate the performance of your business, you’ll need to do the same with your board as you grow and change.
For advice on the finding non Exec board members, please contact the office.