A private company board of directors directs a company on a fiscal or strategic level. The board comprises experts in the company’s industry, business, and leadership fields.
Some business leaders might balk at ceding any control to a board of third parties, but plenty of benefits can outweigh the risks.
A board of directors will bring various skills to the table that you won’t be able to master on your own. They provide a valuable outside perspective that can help you clarify your business. A private company board of directors also puts clients and employees at ease by providing a layer of guidance and support that your business wouldn’t otherwise have. The board’s primary responsibility is governance and not day-to-day decision-making.
The board has voting power or say in the company’s decision-making process, although whether their input is binding depends on the type of arrangement your company has. An advisory board, for example, is less formal, while a fiduciary board comprises shareholders who usually appoint their representatives and have veto power.
If you’re assembling a board of directors for your company, here are some crucial steps to consider.
Once your board has been established, please don’t leave it on autopilot. Instead, regularly evaluate the contributions of your board members to ensure that your company is benefitting. Periodic reviews, such as quarterly or annual reviews, will allow you to change direction.
Ultimately, the right board of directors can be invaluable for your company. By assembling valuable members with a clear vision, you can hear new perspectives and learn from other highly qualified leaders in your field.
I offer small business coaching services that can help you learn more about making the most of your board of directors for small businesses. Click here to schedule a free video call, and let’s chat about how to assemble your own effective private company board of directors.
Coach Dave
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