Articles tagged "Board Responsibilities"
When we needed to rapidly move to remote work status several months ago, for many of us, it was just a matter of working more from home than normal. We had the capability to access all or the bulk of our work files and systems remotely. For others, it was a matter of grabbing what files and equipment you thought you’d need for a few weeks and then heading home to then figure out how to: serve your customers while using your personal devices, identify ways to access the company’s network of digital and possibly some paper files, get information from colleagues also working remotely who have poor internet connectivity, while also integrating any new company equipment provided to you into your remote work worlds. In the immediacy of the need to work remotely, you made it work. However, as more and more of us are anticipating a permanency to either a completely remote or a partially remote work environment, it’s now a priority that we, as leaders, get control of where our organization's files, equipment, and knowledge is being housed.
As you look to the next 12, 24, or 36 months, is your board of directors composed of the right people with the right skills, energy, and expertise to help you drive towards your vision? Are you as intentional in recruiting, onboarding, and developing directors as you are with key staff? Is your board a key to your organization’s success. Or, are your initiatives, pace, and success limited because your board believes they’ve fulfilled their responsibilities if they show up, vote, and leave?
Once and for all, let’s clarify the difference between Advisory Boards and Boards of Directors. People often believe they are one-in-the-same and use the terms interchangeably. When, in reality, they are very different entities. And although they are both important, they wield very different levels of power.
The shareholders or members typically elect the people who will serve on the board of directors. In a small firm, the board of directors is usually comprised of the business’ owners and family members. In larger organizations, the boards are comprised of interested individuals from disparate backgrounds and industries that, theoretically, represent the organization’s customer or membership base. The board’s responsibility is to guide the overall direction of the organization and to be the ultimate decision-making authority on strategic matters facing the organization. The company president or CEO reports to the board. The board of directors has voting power and full authority to override the decisions of the President/CEO. The board can hire and fire key staff—including the President/CEO. A board of directors directs the actions of the staff and of the organization.
Unlike the more commonly known board of directors, advisory boards are typically comprised of persons who—individually—are providing counsel to the business owner. These individuals may be attorneys, accountants, business consultants, human resources specialists, marketing professionals, etc. Each provides expertise and guidance to the business owner separately. An advisory board simply provides a way to pull these various advisors together on a monthly, quarterly, or semi-annual basis. Then, as a group, they can discuss the issues facing the company and can oft times determine quick solutions to strategic company issues. These advisors are not elected and they have no voting power. They are asked by the business owner to serve as a member of the advisory team and are paid for their advisory board services (as the board is usually a continuation of their current services). Their job is simply to advise.
I often suggest to my smaller clients that they start an advisory board when they are not yet comfortable with the idea of expanding or creating a board of directors for their company. Determine what is right for your organization and then invite them, advisors or directors, help you lead your organization to success.
Remember: Advisors advise — Directors direct.
As a past president of NSA-DC (National Speakers Association – Washington DC Chapter), I recently had the privilege of interviewing Ron Culberson, MSW, CSP, owner of FUNsulting, Etc. Ron is an expert in bringing humor into the workplace to enhance productivity as well as morale. Ron is the President-elect of the National Speakers Association (NSA).
Click at the bottom left of the video player to begin the interview.
If you're wondering when to update your company's strategic or business plan, here are ten indicators it may be time:
- Someone wrote "Update Me" in the dust on the printed version of your plan.
- You vaguely remember creating your plan about the same time you bought your first fax machine.
- When asked if they've ever seen your company's strategic plan, your employees laugh and reply, "Strategic plan? This company has a strategic plan? I don't believe it!"
- You ask eight different employees to identify the top three projects the company is working on and you get eight different answers.
- Projects and project budgets drift and are regularly "cannibalized" by new projects.
- There are regular turf battles across departments on whose project is more important.
- Your company no longer does what your mission statement says you do.
- Your current company vision is similar to: As a premier company, we will provide exceptional services so that we may exceed our customers' expectations.
- The economy has changed. Regulations have changed. There are new competitors and new business models challenging your products and services.
- Another year has passed.
You probably need to update your plan, right? However, before you dust off your old one, stop and ask yourself a very basic but important question:
"What do I need this plan to do for my company?"
"Do I need an updated plan to share with my bank or an investor to support my request for credit or capital? Do I need an updated plan to reshape the focus and direction of the company given changes in our industry, the economy, or other factors? Do I need an updated plan for my team to use as our roadmap over the next few years? Or, do I need to update my plan because it's covered in dust!"
Whatever your reason for realizing an update is in order: Great! However, you need to be clear and honest with yourself and your team going into the planning process. Whatever the reason: financing, strategic, or business operations, if you want your plan to actually be of use to you, it needs to become one of your primary management tools that you consider every day - and I do mean every day. It's not doing you or your company any good if it's sitting on the bookshelf. An effective plan takes time, dedicated thought, and coordinated planning to develop. Updating your plan doesn't have to be painful. However, it needs to be purposeful and then it becomes incredibly useful. I'll share why and when to update your company's plans in this article, and in a future blog we'll talk about how to update it and manage it.
So why do you create or update your company's plan? As suggested above, first determine what purpose the plan will serve. If it is a financing request, you'll need a business plan and its intended purpose is to clarify financial need and payback terms. You then need to include relevant, clearly outlined financial projections of capital need, revenues, cash flow, expenditures, etc., over the period in play. A good Certified Public Accountant can help identify and prepare the appropriate financial statements, schedules, payback projections, and charts to bolster your case. However, remember, the reviewers are going to need to be "sold" on you and your team's management capabilities, business/market strategies, and overall projected "Business Plan" to ensure the success and payback you're projecting. You're asking a bank or investor to "be sold" on your capabilities to do what you say you can within a specified time period. You need to consider and address all of the possible "But what if," scenarios they may ask. Remember, they're trying to protect their investment. If they believe your plan, you may get the money. If they don't, you won't.
A strategic plan and a business operations plan are more internally targeted as the audience is more often the board, management team, and employees. Stakeholders and others also review the plan, but a strategic or business operations plan outlines organizational direction and major projects to move the organization forward. With these types of plan, you're not focused on "selling" your qualifications to anyone. The purpose of a strategic plan is to clarify where your organization needs to be three or more years into the future to ensure its viability and success - i.e., your company's big goal; its vision, and then broadly, how you will get there. A business operations plan then details the goals that need to be accomplished to move your organization toward its vision.
Given the rapid changes in technology, the economy, regulations, etc., my clients are now limiting their strategic plans to roughly 3-5 years out; business operational plans typically focus on the next 1-2 years so they can adjust to environmental conditions as needed. Business Operations plans serve as a roadmap for management on what needs to happen and when to ensure there is a well-orchestrated coordination among all departments and projects to move the organization forward. When created effectively, strategic and business operations plans become critical management project planning and tracking tools that are referenced regularly.
Now you know when and why you would update your company's plan. In a future blog, we'll talk about how to update and manage your plan.
Copyright MMX - Liz Weber, CMC, CSP - Weber Business Services, LLC – www.WBSLLC.com +1.717.597.8890
Liz supports clients with strategic and succession planning, as well as leadership training and executive coaching. Learn more about me on LinkedIn!
(As printed in the PA Business Woman Magazine MMX)