Forming new-style boards
Whether you’re a Start-Up, an Up-Start, or a well-established growth business, you can benefit from setting up one or more of seven new-style boards.
Replace or complement your corporate board?
At your choosing, these seven new-style boards can replace, or complement, your corporate board:
1. Strategic innovation boards [SIBs] – which focus on creating and building you a future. SIBs suit you if you want to take big, new and different leaps forward whatever those leaps might be.
The Venture Bank, New Enterprise Services, uses Strategic Innovation Boards as key vehicles to design, develop, commercialize and get numerous intellectual properties and transformative technologies profitably to global markets.
2. Management advisory boards [MABs] –which concentrate with you on managing the present, the organic growth, and the uncertainties and risks of your business. Sometimes these are called Business Advisory Boards [BAB]. Or just Advisory Boards [AB].
MABs are a great way for family-based Pty Ltd companies to access core talent effectively, train family members and management, meet multiple core objectives, and prepare for a big leap forward.
They suit companies wanting to do what they already do far better, and to position themselves for high growth, or an IPO, trade sale, or exit.
“An advisory board is a rare species in the small-business ecology, yet assembling such a board may be one of the most important steps a CEO can take to assure an enterprise’s success.
“Besides offering credibility and contacts, advisers working together provide guidance sharpened by boardroom debate, something individual mentors can’t match,” writes the staff of Inc Magazine.
3. Pop-up boards, or boards for hire [PUPs] – where a company that specializes in providing a range of services to Boards, recruits, briefs, appoints and monitors a ‘packaged’ board to get you the project outcomes you require.
“Pop-up boards add value at critical junctures in a businesses growth cycle at a significantly reduced cost to permanent board structures,” suggests Andrew Donovan, the Managing Director of Directors Suite specializing in forming such Boards.
“Pop-up boards can be used to challenge or redesign business models, test acquisition readiness, build risk management systems during rapid growth, establish succession plans or ensure sale readiness.
“Pop-up boards can be one-off or recur over several years, with varying membership based on need. Pop-up board members are directorpreneurs– bringing the full suite of entrepreneurship, directorship, management, consulting and mentoring capability as required.”
4. Virtual boards – made up fellow entrepreneurs and CEOs who mutually assist each other, as if they were each other’s corporate board or SIB or MAB.
5. Joint-venture innovation boards – where existing businesses create a jointly-owned entity and board to get a major innovation developed and to market. These joint ventures can be either incorporated as companies, or remain unincorporated.
Recent examples of high profile incorporated joint ventures include:
- Patrick Corporation Ltd’s Pacific National rail freight joint venture with Toll Holdings Ltd• Macquarie Bank’s joint venture with Virgin Money for the provision of retail financial products
- BETFAIR’s joint venture with Publishing and Broadcasting Ltd to establish an Australian online betting exchange
- Australia Post’s joint venture with China Post to provide logistics and supply chain services to Australian companies operating in China
- Hydro Tasmania’ joint venture with China Light & Power for the development of wind power in China
6. Co-operative boards – where business or social entrepreneurs create a ‘tribe’ of mutual interest, and set up a board of members to raise funds, and make things happen.
7. Ad Hoc Boards – where you may meet with a small group, over lunch or coffee, as needs to be – to work solidly on issues that keep you awake at night.
Your current situation – we imagine you are:
So, your board of directors…
… will be something like this:
- you are the sole director
- you have a board in name only – made up of your spouse and family members
- you have an official board, which meets but only rarely – perhaps because it’s all family
- you have a multi-member board, but it’s not adding great value
- you have an official board, which meets regularly and concentrates mainly on operational and governance issues
- you have a proper corporate board that adds great value and balances two tigers – the strategic per-forming role and the watchdog con-forming role.
Voila! A new style board
In all of these cases, you can benefit from setting up a new-style board, as well. Which brings us to…
Why are these new-style boards emerging?
First, because the world is changing and corporate boards alone are not the sole answer to your business needs.
Second, because around the world legislators keep increasing the legal responsibilities on corporate directors. So fewer really talented directors wish to join corporate boards – given that may place their total assets, income and reputation at personal risk.
Third, because these same highly-talented and experienced people don’t want to work for fees. Or not just fees. Rather, they want to share in the added value they bring, as they bring that new value to you and your business. Setting up different new-style boards facilitates this.
Fourth, custom-built new style boards give you as the Founder or CEO greater flexible, and greater control, over your business – at lower overall cost.
If you have a formal corporate board, you as Founder, Owner, CEO report to that board. And that Board of Directors has the legal power to hire, fire, mentor, direct and monitor you! They are your boss. Even if you own 100% of the company.
You may remember, the Board of Apple fired its co-founder Steven Jobs. And then, later, when he built Pixar Animated Studios, they acquired it, and reinstalled Mr Jobs as Apple’s CEO a year later.
So your alternative is either not to have a Board. Or to keep it tame and nobbled – especially if you live in Australia, the UK, Canada or the USA….
Or you can create a new style board, which: Reports to you. Is hired, fired, and monitored by you. And can mentor you.
A far different equation!
Fifth, in different combinations, these five types of board assist you create a bigger, brighter, better future. And/or help you find the time, resources, funds, minds and bodies to actually build your business securely and sustainably.
These innovative new-style boards are new to the Anglo-Saxon countries of Australia, the UK, Canada, the USA, and New Zealand. But some of them are old hat in some Asian and European countries which are well-used to this two-tier board structure.
Sixth, as you grow these boards can either be adjunct to your corporate board. Or basically replace it!
Old and new
As the world as a whole turns on its axis, the business world continues to morph so does its structures and systems.
And, we recommend, you do so, also. The resources, added here each month, will help you.
Resources for you to access
Thinking about setting up an advisory board?
Eight types of Mentors – which ones do you need?
Advisors versus directors: How to build better boards [USA]
How to set up a board [New Zealand]
Advisory Board Tool Kit [New Zealand Institute of Directors]
How to set up an advisory board to help you run your small business [USA]
Resources to come
How can I get real value from my SIB?
What do I get my MAB to do?
How do I find the right board members
How boards must ride two tigers
The four core talents for a startup or fast growth company.
Special note on marketing and innovation
The late business guru Peter Drucker famously claimed, “The sole purpose of a business is to create a customer…
“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”
Drucker’s view ignored
However, when Forbes Magazine reviewed top management in 2006, they found their priorities, in order, to be: finance, sales, production, management, legal and people.
Clearly, missing from the list were marketing and innovation.
Forbes suggested in 2006, “When one considers the trouble that many of our icons have run into in recent years, it is not easy to surmise that Drucker’s advice would have perhaps helped management to avoid the problems they face today.”
Many. But not all, new-style boards are precisely about restoring that balance. #