A properly functioning board can be a powerful force, but a board in disarray can be a distraction.
In the past, when things were stable, perhaps more businesses didn’t require the support of a board but now, help may be needed and directors must be prepared to roll their sleeves up not just undertake a monitoring or oversight function, they can be a very beneficial asset to the business.
Getting the right director is key to creating a successful board. You need to identify what the skills gap is within the business and look for directors with this knowledge. The board should resemble the market including having technical ability and a presence of women to give a balanced view.
The best performing boards have directors and shareholders who have significant stakes in the business whereas boards whose directors hold numerous additional appointments have a negative effect on the company.
Businesses need to ensure that directors are in close proximity to the company where they can be around at times of need.
A board exists to govern the company not manage it. It’s important that investors understand that and don’t necessarily demand a seat on the board as a pre-condition of investment if they don’t have the competence required.
This article was taken from a Business Exposure Group discussion.