Boards make sense (and cents)

In the 1937 comic farce Topper, a young Cary Grant portrays George Kerby, a playboy attending the board meeting of his family’s bank:

Bank Chairman (reading in a droning tone of voice): “Bullion abroad and in transit, $13,202,854 and no cents.”

George Kerby, (reclining, not really listening): “No sense!”

Bank Chairman: “I just said that, Mr. Kerby.”

George Kerby: “So did I!”

This is how most of us view boards: a group that makes no sense. 

In fact, many of my entrepreneur clients do not have a board of advisors. And that’s a shame, because a properly functioning board is a great way to keep growing, keep focused, and keep out of trouble.

Actually, I’ll go even further and say creating an advisory board is one of the most important steps a middle-market CEO can take. 

Why?

The overall reason is that it’s board’s job to make the CEO, and the company, a success. Beyond that, there are a lot of specific reasons.

The first reason is accountability. CEOs need to keep their staff on task. But who keeps the CEO on task? Unless you have someone of skill, character, and focus on your side, chances are that you can let important opportunities or threats catch up to you. Many of us have initiatives — a sales campaign in a new market, or merger integration. How are those initiatives, which by their nature are just slightly outside the day-to-day, getting done?

Often, they are launched with a great deal of energy invested on kickoff, and then as the CEO’s attention is diffused over time, the energy of the initiative wanes with it.

But if you consider a company initiative nothing more than a promise to oneself to achieve an outcome, why not use the board to help you keep things on track?

(Continued)

A second, related, reason is vigilance. If you are attuned to the day-to-day and fast-moving issues, get help with equally important but hard to measure areas like acquisition strategy, technology, or competition. A quarterly meeting is just about the appropriate time period to check your traps and regroup, especially if your board members are experts in important aspects of the business that are too expensive to maintain day-to-day. 

Third, use the value of formality. You may prefer to meet your friends at the coffee shop with your overalls half down, but a board is not Monday morning football. You’ll want an agenda, records of the prior discussions, and a review of the next steps noted and what actions have occurred over time. These elements signal to all concerned that the matter of supporting a CEO and his or her company is important work requiring focus.

Lastly, let’s talk expertise.

As I always say, problems are easier when you’ve seen them before. Find recognized experts in areas where you are likely to encounter less frequent problems that have outsize impact. This can be in patents, mergers, or regulation. Not that the board replaces the cost or detailed expertise of your hired professionals, but it will make sure you are in contact with suitable professionals at the right time.

How do you start a board? Let’s see. List the expertise you might need. Then ask your acquaintances for names that might fill the bill. Ask your lawyer or accountant to interview them with you. Then choose five based on expertise, specific experience, and perceived chemistry.

Note I did not suggest we choose our friends, and I strongly suggest that current professionals are not eligible. This is about expanding your advisors, not providing a new forum to the existing ones.

And customers should never be invited to see the inner workings. It is, literally, none of their business.

With the right advisors, agenda, and follow up, the board will provide the thoughtful CEO with a powerful and enduring means of ensuring prosperity, as well as one other thing that is important in business: meaningful relationships.

Makes cents.

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