For many small business owners, working with a board of directors can be a new experience and can be a challenge. This section looks at how to create an effective board and how to run a successful board meeting.
2. How to create an effective board
For many small business owners, working with a board of directors is a new experience and can be a challenge. As the founder and quite likely largest shareholder (it is likely that you own all or most of the business), you are probably used to calling the tune and having the final say on key decisions.
However, a properly functioning board of directors can be a powerful force for your company’s success.
Board members can offer you unbiased advice on a wide range of areas from planning strategy, to getting finance, developing strategic partnerships and hiring the right people. They can also ensure the business is running appropriately by providing an independent overview, ensuring the right checks and balances are in place and advising on policies and procedures.
Your board can be a valuable asset to the business.
Find the expert you are missing
Directors from outside the business can bring experience and expertise that your team lacks. For example, export or overseas experience, or specific financial know-how.
Look for board experience
People who have already served on a board can hit the ground running and also provide direction for other board members with less experience.
Keep the board size managable
Small focused boards mean that more gets done, communication is easier and takes less investment of your time to manage. A board of five members is suggested for small businesses and an odd number of board members helps to avoid deadlock in decision-making.
Choose people who can participate fully
Make sure potential board members have enough time to give to your company – not just for board meetings, but also on an ad hoc basis for advice when challenges arise.
Set clear expectations and communicate frequently
Make sure those you invite to be part of your board are fully aware of what is required of them – both in terms of your expectations and also their duties and
responsibilities as directors. Keep communication channels open throughout the relationship, not just at board meetings.
How often, when and where
There is no set requirement for how frequently a board meets. Although many meet quarterly, you should schedule your meetings to address the needs of your business. Think too about the timing of the meetings – what fits best with your board members’ other commitments - and location – what sort of venue is likely to be the most conducive to a productive session.
Choose your board wisely – they play a crucial role in the success of your business and can help guide you to achieve substantial growth.
3. Running a successful board meeting
Good board meetings are productive meetings, when discussion is focused, everyone has an opportunity to participate and positive decisions are taken.
Here are some tips for running a successful board meeting.
- Prepare well. Make sure everyone has the date, time and location of the meeting in plenty of time.
- Prepare an agenda and issue it to all attendees with background papers a few days before the meeting.
- Communicate with all board members prior to the meeting. Make sure they are fully aware of the focus of the meeting and have all the information they need to make decisions.
- Always start on time and follow the agenda. The purpose of the agenda is to keep the meeting moving, while allowing time to discuss and take action where necessary. Whilst it is useful to prepare your agenda based on a standard format, make sure that you prioritise the topics and focus on the key issues for each meeting.
- Clearly record the proceedings of the meeting. Minutes should be concise and focused – they are an official record documenting what the board discussed and what actions were taken – you do not need a full transcript of what was said.
Remember, minutes are legal documents and should reflect the board’s due diligence concerning whatever decisions are made.
- At the end of the meeting, make sure you check that everyone has had an opportunity to contribute and there are no further points to be made. This should be brief and if major points are brought up, it is advisable to defer them to the agenda for the next board meeting.
- After the meeting, circulate minutes to all board members in a timely manner. Also make sure actions are followed through and board members are kept informed of progress.
Good board meetings are essential to the future success of the business, make sure yours are as productive as possible
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