Should You Have a Board of Directors? (Part 3)
Without BOA, Rash says she never would have
thought to launch a training salon concept, which has emerged as both a
financial and branding bonus. âThis has enabled me to capture a piece
of the market that I would not have touched,â she says.
Chrekyâs reliance on BOA paid off when she asked the board to review a marketing plan she and her team were ready to implement. âIf they hadnât done an analysis of the campaign, we would have gone ahead with unwise wording, and it would have been terrible!â she says. âA board like this provides checks and balances to your business so you know where youâre heading. Sharing how we apply integrity to our businesses has been inspirational to all of us.â
Zona credits his boards with elevating him to a heightened understanding of sophisticated financial matters. To present to his out-of-industry board, he produces his own annual report.
âA lot of people would say that they canât be bothered creating an annual report,â Zona notes. âBut people say they canât be bothered going to the gym, either. For me, producing this report is very useful. I donât make it fancy or hire a graphic artist to do the cover, but itâs helpful to go through the process each year.â
As a side benefit, board members sharpen their presentation techniques, improve their listening skills and enhance their leadership potential. âI treat the groups as though theyâre my boss,â says Zona. âIt forces me to prepare and do presentations, which makes me a better decision-maker.â
But itâs the inherent accountability thatâs irreplaceable. âWhen we outline what we intend to accomplish for the coming quarter, at the following meeting the board will refer to those stated goals,â says Charles. âIf we say weâll do something, theyâll hold us to it.â
Zona agrees. âBusiness owners tend to ask pointed questions,â he says. âWhen you own a business, you donât necessarily answer to anybody, and because of that we can trick ourselves. The other business owners call you on your own claims.â
Adds Rash, âMeeting over coffee is one thing. But these are skills that even help you run your own staff meetings, because youâve now experienced a meeting on a level at which youâre not the team leader.â
Board camaraderie alleviates that lonely-at-the-top feeling, agrees Zona. âOther business owners live the emotional life and experience the same risk tolerance that I do,â he notes. âThe board establishes a like-mindedness and a joint commitment in helping each other along thatâs naturally effective.â
The Onboard Board
At The Face and The Body Spa in St. Louis, owner Peggy Mitchusson was meeting two to three times a year with an advisory board primarily consisting of clients with business backgrounds. Then about six years ago, she looked around at the presenters at those meetings and saw a management team that could take over the board role. Mitchusson made a strategic decision to replace her advisory board with her own executive team.
âOutside people could be objective, and everything they said was pertinent,â Mitchusson says. âBut we spent so much time explaining things, catching them up. Having an inside group means that the board members are all industry experts and know exactly whatâs going on at the salon.â
With 11 members, Mitchussonâs inside board is three to five participants larger than her previous board. Currently sitting on her board are the salonâs:
- Owner (Mitchusson)
- Chief financial officer (CFO)
- Marketing director
- Three location general managers
- Three location customer service managers
- Purchasing director
- Director of development/corporate sales
Mitchusson paid her outside board $500 per meeting (or $750 if they
preferred to take their payment in spa gift certificates), attendance
at monthly board meetings are included in her management teamâs job
descriptions. But the bigger benefit is that this arrangement has
enabled Mitchusson to move toward an Employee Stock Ownership Plan and
continue to help her business grow rather than sell her business in
order to retire.
âWeâve had a lot of growth,â Mitchusson adds. âSix years ago I didnât have as much formal structure, and I didnât staff all of these positions. But we couldnât realize, until we started meeting as a formal board that, for us, this is such a better way to do it.â