Posted on 12/05/2016, 09:08
Pro-actions is convinced of the value that a well-constructed and run board meeting can deliver to a company. As part of a mini-series focusing on the board meeting we explore –
We are often asked “How often should I run board meetings?” and my answer has always been “it depends on where the business is” – if ….
Then the need for board meetings can be less frequent than businesses that are not in this position. But my default would always be monthly.
What is the purpose of a board meeting in a small company?
The key principles are that they fulfill the directors’ responsibilities and drive the business towards the planned goals. Directors’ have a number of important legal responsibilities including to ensure the business is managed in the best interests of the shareholders, is solvent and is able to pay its bills as and when they fall due, is compliant with business legislation (e.g. tax, health and safety etc.) and to hold the management to account for its performance in managing the business to achieve its long and short term goals.
There is a reason why many small businesses don’t have regular board meetings. They are typically run by owner managers who often fulfill three roles; shareholder, director and manager. So where in a larger company the roles are held by separate groups of people, each holding the other to account, in a small business they are often the same person(s) meaning that the system of checks and balances can be lost.
When preparing for or attending a board meeting, you need to be wearing your director’s hat so that your view of the company is focused on your legal responsibilities and whether the management is running the business properly and delivering against the long term plan.
What is the secret of a successful board meeting?
The key secret of a successful board meeting is having the right people around the board table so that you can take a dispassionate directors’ view. That means at least one person should not be involved in the day to day running of the business. In a larger company this role is fulfilled by the non-executive director(s). In a smaller enterprise the same result can be achieved by including an independent third party such as a business coach or mentor to facilitate the meeting.
Thereafter you will need a focused agenda, the right information distributed ahead of time, and a well-run meeting with a clear action orientated outcome.
Invite us along to your next board meeting…for more information call us today!
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