Today we are going to look at the term BOARD OF DIRECTORS. If you have ever wondered what is a board of directors or what is the function of a board check this animated video out.
As a former Dragon on BBC Online Dragons Den, business columnist for The Scottish Sun and Serial entrepreneur, I know a thing or two about business, my new series of vlogs where I will turn you into a business expert who even knows the lingo Along with throwing in a few entrepreneurial words of wisdom…
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I’ve been an entrepreneur for more years than I care to remember but I can still remember what it’s like to start out. It’s exciting, thrilling and terrifying all at the same time! When you’re launching a business, you’ve got enough on your plate without worrying about what silly business terms mean, so my series Speak Like Shaf will explain all those pesky and confusing phrases in detail. This week’s phrase is board of directors.
You’ve probably heard this term even if you don’t run a business but do you really know what a board of directors is and what it does? Well, in an established company, the board represents the shareholders. They are responsible for coming up with the polices to oversee and manage the corporation. Generally, they are responsible for the strategic direction of the company. Private companies, charities and non-profit organisations can all have a board.
What we are interested in today is a board in a start-up business. Sure, in the early stages, it’s unlikely that a board will need to be involved. More often than not, the founder owns the business and there really isn’t any need for managerial oversight.
If and when investors get involved, they will start to demand a seat on the board and will want a level of structure around governance.
If you are starting up, it’s worth thinking about a slightly different type of board, in the form of non-executive directors. They are a group of experts who oversee the activities of a start-up. They are directors who don’t have management responsibility but can be worth their weight in gold to a fledgling business. They have skills, knowledge, contacts and industry experience so use their strengths. They are senior people and will have a fantastic amount of experience. Remember, when you are starting out, they will be able to advise you on operations and strategies as well as being a general support to you.
You will need to make the decision about whether to go it alone or get non-executive directors involved. Let’s have a wee look at what my pal Rab The Rock Star did. He was an original Stone Age entrepreneur and regular viewers will know that he struggled with the same sort of decisions that today’s business people also grapple with. His genius Steve Jobs moment was to found a tool-making company to help the hunters in his village catch more mammoths and deer. His business grew and he had to take on three employees to meet demand. It occurred to Rab that he could have a board to help steer his company but in the end he decided against it as he wanted to remain 100 per cent in charge. In fact, the only board he really needed was a chopping one to make his tools on.
If, unlike Rab, you decide you’d like some non-executive directors, make sure they fit in with the company and you can work with them. Can they help move your company forward, are they strategic thinkers? Your non-executive directors will be able to make a positive impact and give you good advice.
So you see. There’s far more to a board of directors than you thought! Don’t miss out on next week’s Speak Like Shaf and remember to like, comment and subscribe.
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25 авг 2024
