How can I get a growth oriented Board of Directors/advisors? This article today is brought to you by TechBuzz Hub in association with its partners
How can I get a growth oriented Board of Directors/advisors?
This article today is brought to you by TechBuzz Hub in association with its partners the mastercard foundation and the innovation village among others. In a special way today, we bring you Mr. Patrick Obita. A management consultant, author, family man, artist, founder of kiti children sports, co-founder, manager resource center. With vast experience he shall lead us through what he does most, coaching and training managers in various managerial aspects.
The metaphor of a tree.
All of us work in beautiful companies. The tree represents companies we have, it’s surrounded with a lot of things it has to manipulate to keep standing out. Right now a lot of companies are facing uncertainties that have disrupted the business environment.
The tree can’t stand tall if you don’t have good behaviors that are constantly changing. Under the tree being clean so its kept close, might be a golf course, surrounding cleared so tree keeps standing tall above each and everything around it yet environment keeps changing.
Companies facing a lot of issues of codes of conduct and basic practices which are being recommended at the investor level, global level, regulator, national, corporate governing industry and academic study field, all these need a director to provide professional guidance/ need to understand conflicting signals coming from these many sources.
At the end of the day for the company to stand tall, need to stare through all these challenging times, how changes in the interest of stakeholders, disruptive business environment by having a board of governors.
What is the board of directors or advisors?
It’s a group of people who jointly supervise activities/operations of for-profit or non-profit. Their work is basically to supervise and give guidance on the different operations that go in the business.
Starting the selection, starting the selection may really involve a lot but not really too much as shall be mentioned below. However, there are key questions that can guide you through. It involves legal requirements about the constitution, founding members, what type of board do we need, supervisory, single tied, why do you need them? To grow business, improve governance, legal requirement,
what’s pushing you to have them, what’s pushing me if am founder, are you ready to relinquish power and authority, to these people or not?
major purpose, accomplish formal object set out in company foundation documents, might be written or not, short term or long term,
How we achieve that?
We can achieve that using powers vested in them, guided by foundational documentation, applying wisdom and experience to solve company problems, only achieve major purpose if apply collective responsibility principle, balance interest of staff, regulators, governors, investors, whether inside and outside
How the boards come on?
They are elected through and by shareholders, you have a SACCO and contributors are shareholders and elect committee that steers objectives and oversee running of it, administration wing of Sacco, strategic direction for it, advertise for them to come on, they are then recruited either by management, a committee of directors or trustees. insurance advertise for a board of director positions if you have the quality, innovative, knowledgeable, appointed by founders/ trustee want to get out of the process of management and also need for fresh ideas.
Advisory board
This is a group of individuals selected to help advise the owner regarding issues such as marketing, financial, legal, management or it’s a body that advises the board of directors? They simply advice directors on issues they’re facing but have no voting power. other names for it are “thinktank”, steering committee, project board, business advisory panel, advisory committee/team/ group
CHARACTERISTICS of advisory board
- They are a volunteer group; this means that they are not paid for the work they do in form of a salary.
- No formal legal responsibility,
- No decision making authority, they do not have the power to involve in decision making of the company.
- Don’t issue directives to be followed, subsequently they do not issue directives with an imperative to be followed
- Formed by management or board, the board of advisors is formed by the management or board of directors to help them in making the right and informed decisions on the company.
- Report to management or board, the board of advisors always reports to the management/ CEO or to the board of directors.
- Rarely compensated- work for free in exchange for networks, growing profile since they are even voluntary
PURPOSE OF THE BOARD OF ADVISORS
- Help company gain new insight to solve problems/ out of box thinking. This is because they advise from a non-biased point of view
- Help explore new opportunities/stimulate robust quality conversation,
- Provide current knowledge, critical thinking, analysis- making the decision maker confident
- Guide quality improvement, question process, manage the operation,
- Encourage exploration of new business ideas
- Challenge how work is done in the company
WHEN TO FORM ONE
Then the question when do you need a board of advisors. Simple, when there’s a major crisis, current issue or a new concept. When you need to address the issue outside the usual scope of the formal board, need to expand the company.
Dos’ when getting board of advisers (what are the things to do when getting the board)
Interpersonal chemistry with prospective board members, create an interpersonal relationship with the particular people you want to bring on board. Let there be rapport between the two of you because these are the people you are going to be trusting in a few months or years.
Show them the passion for the company focus area, and let them vividly see or experience it, thus they shall have the capability to help, avail time and willing to be advisor, get those willing to lend their name and credibility but not giving actual work to it.
Don’ts OF THE BOARD OF ADVISORS
They are not expected to be doing the following so much so that when such characters are sighted, should be a trigger that they are not the right people for the job.
- Short sited people,
- Reactive,
- Narrow thinker/no challenge,
- Pessimistic persons/negative/ underappreciating work done,
- Lack of diversity/gender-issues/experience wise/only same thinkers, qualities don’t complement the board,
- A person with a name but no knowledge skills or expertise is not a good fit for the board of advisors.
Considerations when forming an Advisory Board.
When forming a board of advisors, you may want to have a few considerations in place as you form the board these include;
- what`s expected from them, it must be clear to both you and the individuals or the group of individuals what you expect of them as well as what they should expect of you. This can be in terms of the mandate, goal/focus, compensation,
- terms of membership on board, the terms of the membership must as well be clear to all the concerned parties, this includes the size composition, frequency of meetings, confidentiality, ownership of ideas among others.
where to find members
For those who have never done this could be asking themselves where can we find the particular people we want on our board of advisors.
- Your connections, your social network, people you have and are interacting with can be a good source. Why? Because you already know these people and you therefore have already built rapport with them.
- Former professors, family members, friends, that whom I rhyme with, networking/ get to know people, expand your scope of friends, attend community meetings, stop keeping in your cocoon
- Ask from peers or network, you can as well ask the people you work with, your friends to help you find more other people that can be best fits for the
- Meet with potential advisors to see if they fit/ try and fail but never fail to try
Q: Which suits a company best? board of directors/advisors. throw more light on, and different the role of board and management
Ans: Board strategic and governance body that oversees the direction the company is supposed to take and set the direction, management is concerned with day to day running’s of the company e.g. staff recruitment.
Q: How can you gently fire a board member?
Ans: For an advisory board, it is easy to fire/let them go, it’s not legal, they’re just giving you advice, if board of directors, providing governance and they’re by legal documentation, can be sued if they don’t do what they’re supposed to do.
Q: What is the board charter and what does it do in relation to the board of directors and advisors?
Ans: The board charter should carter for all this, you can all decide whether to have an advisory board, whether there should be having them or not, the advisory board can be any number but the board can be specified in the documentation or legally
Q: What is the relationship between shareholders and board of advisors?
Ans: Shareholders are owners of company and board are people that give their opinion about the company e.g. how’s it doing, how it can move to the next level, a shareholder can decide to get a board of advisors
Q: Regarding an advisory board, if as a founder you need advice, do you contact one by one or meet all at once.
Ans: Depend s on your need, you can have one on one depending on the expertise of the person or call all at once if you know they`ll give you the best advice all depend on how you’ve structured the.
Q: Do you recommend a transition from advisory to the management board, at what point do you transition?
Ans: Sometimes, boards of directors use advisory boards as a ground to train the board of directors, indirect grooming
Q: Highlight the setup of a board for a non-profit entity
Ans: The Board of directors depends, going back to the constitution of that entity, NGO and nonprofit stipulate the kind of people they need on their board. at that level that you have the different boards come on for a non-entity for example; assuming it`s a tertiary institution and regulation says you should have 13 and so many should be ripping the community, the ministry, all this depends on foundational documentation.
Q: Does it matter the number of employees or size of capital to be able to work on having a board or advisors?
Ans: Board of directors is an expensive venture, if the company doesn’t have the financial ability, they should then get a board of advisors where cost is deflated.
Q: Highlight the setup of a board of directors/advisors of a non for profit org and how is it set and what practical framework can guide this setup
Ans: Legal policies, documentation, legality, is what forms the board of directors.
CONCLUION
keep in mind, just advise, peoples opinion, the company is yours, it’s you that listens to the customers, whatever doesn’t rhyme with your gut, get another decision, you will have to synthesize whatever you’re feeling and make the decision.
Thank YOU!!!!!!!!!!!
The next webinar and blog brings your mind to finding out how you can sustain your company alongside having a well built and fully fledged board of directors or advisors. Make it a point not to miss out, and invite a friend or two.
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