When business owners talk about a board of directors, this often conjures images of long and stuffy meetings, elderly men in suits, and deadlocked decision making. For modern businesses, many are trying to do away with this outdated image and reinvent the board of directors as something that is genuinely useful for the growth and development of the business. Before taking the plunge and deciding to build your board of directors for the first time, consider these vital tips.
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What role do directors play?
Your board of directors are responsible for making key decisions within the business and often act as an advisory board to the business owners. Some may play devil’s advocate to ensure that all possible consequences for key business decisions are fully considered. When building a board of directors, business owners have the opportunity to identify any skills that might be missing from their management team and hire based on these shortcomings.
Broaden your horizons
It’s a well-known fact that when making hiring decisions, we tend to go for people who look and think like us. We feel more comfortable around people who are similar to us, and we take this affinity to mean that we’ll work well together. While this might be true, by closing yourself off to people who are dissimilar to you, you might be missing out on key business opportunities. By choosing people from different circles, you will bring a fresh perspective to your company and be able to identify more opportunities.
On hiring from within
While you are able to appoint board members from within your organisation, you should do so with caution. Accepting a position on a board of directors means that you rights within a company will change, so you should always check that you are on the right side of employment law. Employees who are in line to be promoted to the board of directors will need to be aware that their employment rights will be affected.
Things to avoid
Your board of directors have a legal responsibility to promote the success of the business, and as such, you must ensure there are no conflicts of interest that could prevent them from fulfilling their duties. One of the easiest ways to avoid any possible mistakes when building your board of directors is to appoint a legal professional to your board.