Panel Board
My Very First Board Meeting of Directors ..
Can invent a terrible story about this, but I will not lie – I had avoided (as in postponed is elusive, delayed) have a board so far. Frankly, I had visions of having a group of old, grumpy men with no sense of humor tells me what do.
Of course I was being lazy, too. I would rather be out making products and the creation of a business than sitting there trying to make sense of the Excel files, charts and graphs, and essentially bored to death in the process.
Our company, however, has reached the point where "good governance "is important … even necessary. The 'let's do it because everyone thinks he is a really good idea mentality" had to go. I really needed to be able to show that all of our stakeholders are represented in our decision-making – and represented fairly.
So I asked my business mentor and close friend, who knows and understands our industry well, to be the first member of the board. Now let's be clear – I do not ask because he is my "friend." That would have shown a very poor opinion, and frankly, friends are not always the best business advisors. I asked because the only person who advises me on everything, "board type" things, anyway!
So Picture this: I felt like a "big kid adult" long pants, carrying my briefcase full of notes, reports, printouts of Excel, etc, my first board of Directors meeting on Friday, February 15, 2008, 2 PM EDT.
If you're imagining a dark-paneled great room with a long table, think again. Outside of our "boardroom" were chickens, squirrels, birds and other creatures – large and small, wild and domestic. Inside the Boardroom "(plus the board members) a dog (aka The Wolf), two cats (also known as Puffy and Fluffy), and five children. Yes, we were at my friend's house, gathered around your table kitchen.
Maybe someday we will meet in that dark room paneled with a long table. But I do not care how big my business – I hope we can continue to comply with the feeling of a family. " There was a certain calm, a serenity almost around the entire meeting. There was nothing stuffy or formal, although it followed the rules of an appropriate meeting.
So my first board of directors meeting began with a brief lesson what happens in board meetings! My friend and mentor gave a simple explanation for that five minutes of board meetings is … and in the process, which changed completely my preconceptions. That's what I really want to share today.
What do you think it is supposed to happen in the meetings of the Council? – Strategy business planning?
– Recruitment strategy?
– Financial planning?
No, no and no. Those are the things you thought that had to happen at a board meeting, but what has always been wrong. The things mentioned above are the territory covered by the company management … no board directive.
The Management Board has exactly one responsibility and that responsibility is …
GOVERNANCE
Just as a nation sovereign, each company has what they call "social pact". These articles "are really the laws – or rules – that the management of the company must comply.
So the whole purpose of the board is just to make sure these laws are enforced. The point is on the board to ensure that decisions taken in the daily operation of the company are really in the best financial interest of shareholders.
Of course, not all decisions are taken by management are the right choices – anyone can be wrong, is inevitable. But decisions must be made within the laws established in the covenant social. No decisions can be sneaky, they can not have malicious overtones, and can not be decisions that fill the pockets of management at the expense of shareholders.
Here is just one example of the kind of responsibility assumed by the Board:
The Board does not decide who is hired to fill a position. The board simply "Empowers the management" to pursue such employment. Management is still work to make the final decision on who is hired to the post. The Board only recognizes that they understand why the position has been created and filled.
The governing board. No strategy.
So in the end, I did not have all the printed spreadsheet and detailed notes. What was needed was exactly what I have – a lesson in how to think about the value of shareholder, while running the company.
About the Author
The Mystery CEO is a young entrepreneur who started a company now doing close to $2 Million a year right in his DORM room!
Now he lets you watch over his shoulders as he learns more about entrepreneurship. You can even listen-in when he interviews CEOs who manage $100 Million+ companies!
Read his entrepreneurship blog right away for all the entrepreneurship training you’ll ever need!
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