Private Companies – Why Form a Board? | Small business news; tips; networking

Posted by IanDSmith under Management
From http://www.portfoliopartnership.com 3974 days ago
Made Hot by: maestro68 on January 1, 2014 12:59 pm

Every public company has a formal Board of Directors with fiduciary duties to shareholders. However as the owner of a private company I'd like use this post to highlight some of the objectives, benefits and costs of various forms of Boards.

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Comments

Written by lyceum
3972 days ago

Ian: Thanks for your input. It will take some time to "chew" it! Have you talked to the board association?

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Written by lyceum
3972 days ago

Ian: Thanks for sharing your views on this issue. Is the main problem with the advisory board, that the member are "only" giving advice, they can't enforce them into action somehow?

In Sweden you had a problem with board members in public companies that are not doing their job. Often it has been a politician that have been sitting on several boards, lifting a hefty sum for being a figure-head and some kind of spokesperson for the company.

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Written by IanDSmith
3972 days ago

Martin, yes that is a central point. They give advice, there is no follow through and they don't see the CEO for say 3 to 6 months. I suppose compared with a well run monthly Board I feel they fail to deliver much value. A sub-agenda for me is how committed board members are to the cause. Because of the way Advisory Boards are chosen and rewarded I'm not sure there is much "skin in the game".

I think with any leadership team they all need to be passionate and committed to the success of a signed off set of objectives. I often see Advisory Boards formed around friendships which is fine but with no real strategic plans in place to give the team context. Public company Boards often show some of these symptoms, as well, as you point out.

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