Are you the owner of a successful business? Despite your success and best efforts, you will still face challenges. One way of helping you and your company navigate through these challenges is to have a board of directors in place.
A board of directors is made up of people who have decades of business experience. These members can help guide your business leaders to make strategic business decisions. Their expertise can range anywhere from financial to marketing and legal knowledge. No matter what it is the board of directors is advising your company on, you can count on their expertise for guidance.
Boards are independent entities from the business they work with. They work for the company’s best interests but are free from conflicting interests that could possibly compromise their judgment and keep them from taking a solid stance when necessary. Having this layer of accountability is crucial for the success of your company.
Credibility and Legitimacy
When your company has an effective Board of Directors, other institutions and business partners will view your business in a more credible and legitimate light. Yazad Patel writes:
“An effective Board portrays integrity and availability of balanced objective advice which helps mitigating risk. Financial Institutions, Investors and partners view it favorably, which effectively lowers the cost of capital financing for your company.”
One of the major duties of the board of directors is to provide governance to the company. The board is instrumental in developing a governance system that dictates the relationship between the board and the CEO. The board helps to determine when and how frequently they will meet with the CEO.
Having a solid board of directors in place for your business is invaluable. The board can provide business expertise and advice, they provide accountability, credibility and governance. Some business owners fear that a board of directors will interfere with their business decision making or are weary of the cost of a board of directors. These fears may be legitimate, but the biggest fear a business owner should have is not having a board of directors.