Business owners are great people. Without them, no one would have a place to work (unless you work for the government). So we should all say “Thank You”! Most business owners are risk takers, very decisive and very motivated. They have the vision and the energy to execute that vision. The future of the business and its employees rests on the shoulders of the business owner. But who looks out for the best interest of business owner and the businesses they created? Besides your outside trusted advisors (CPAs, attorneys and bankers), all business owners should consider a board of directors.
The right board of directors is small enough to be efficient and diversified enough to be effective. A properly built board of directors can:
- Provide knowledge in specialized areas of experience and expertise such as law, finance or marketing to help guide your business.
- Provide different viewpoints to help you focus on your overall business strategy in good times and during difficult times.
- Provide advice and perspective to make the hardest decision – expand product offerings, expand into new regions, obtain capital or financing, hire employees, involve a business partner, downsize operations and even develop an exit or succession strategy.
- Provide the business with the right contacts and business partners.
- And most importantly challenge the founder (business owner).
A board of directors should not simply be a group of your friends, golfing buddies, high profile people in the community, cool people to hang out with or “yes-men” (or “yes-women”). Their goal is to provide a unique perspective for your business and challenge you and your management team.
A board of directors allows the owner the unique opportunity to look at the business objectively and to develop and improve the entire business. Don't underestimate the impact a board of directors can have on a family business.