Strategic Planning in the Small Business

Unit 6

HO 6-5

(Continued)

I've found

that less than one

out of every 20

businesses ilave any

truly competent

outside

directors.

And of that

small percentage,

only a few (one out

of ten) w.li have

a majority of

%,ompetent

objective outsiders.

The

fact that boards

are not widely -

or effectively - used

is due more to

a lack of

information,

than to inherent

problems with

the nature of outside

boards of directors

or to the

special circumstances

so often

raised to deny their

usefulness.

I would like to do

my part to add to your

share of information

by addressing

these five

questions:

* What

are effective outside

boards like?

* How do they

help?

*

When are they

most likely to help?

*

What about a director's

liability?

0 Should

you t'ade your consultant

in for a board?

So, let's

begin.

What are

effective outside boards

like?

Members of effective

outside boards

are non-self-interested,

mutually

respecting risk­

taking

peers who are not

indebted to the owner/manager

in any

way. They must

be able to sit

across

the table from the

owner/manager and

tell the truth as they

see it, no matter

how rough

that truth

is.

An ideal

board might consist

of: A person with

experience in financial

management

and

control;

A person who

is strong in the owner/manager's

area of

weakness in a comparable

(not

identical)

industry; A person

who runs a business

that has successfully

grown the way

that the

owner/manager's

company might

grow; A person

who is successful

in an area into which

the

business

plans to expand;

A generalist with

the energy and personality

to spark everybody's

best

efforts, someone

who can bring in the

offbeat and unexpected.

Board

members should

have proven ability,

self-confidence and

enthusiasm. They

should

be respected by

their peers, and

they should demonstrate

respect for the

owner/manager.

Does this

sound too ideal? I

can assure you that

I have seen it happen.

But you may

need help -from

the outside -to make

it happen.

How do

outside boards help?

They help by giving

technical, financial,

organizational

and managerial direction,

review

and support.

They help dddress

questions like these:

What are the true

needs for the future?

How much growth/change

is necessary/helpful/indispensable?

What effects

will this have on the

organization?
The minority shareholders?
The owners?
How can we
balance the response
to

personal and corporate
needs?

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