FEATURE
PAPER
Restoring
Trust to Your Board:
Trust Or Consequences
The
following paper was presented at the 2007 USASBE/SBI Conference.
It was written by William A. Andrews of Stetson University.
Abstract
Every useful board
eventually encounters considerable internal strife. Qualified
board members are typically people who are intelligent, informed,
and principled. It is little wonder,
then, that a room full of such people can generate quite a bit of tension, and
in the face of
misunderstanding, distrust is easily bred. How can she think like that?; Hes
just advocating
for what will advance his career! Once board members have lost mutual trust,
effective decision-making becomes unlikely, and the fissure will creep through
the whole organization
either by politicizing it into actively warring camps, or by paralyzing it as
management seeks to
avoid being perceived as taking sides.
Disney and HP are
two examples of companies which languished while their boards
warred on. Eisner and Fioni eventually left their respective
companies, the board wars ended, and both
companies thrived under new leadership. Board dysfunction can be even more pronounced
on family business and non-profit boards where members are
generally volunteers, lines of
authority are less clear, or success metrics are hazy. Also, this paper could
be applied equally well to a top management team with only
slight modifications.
Read
the Entire Paper...
TIP
OF THE WEEK
Suggestions from a Panel of Experts on Advisory Boards
Reasons for Having an Advisory Board
It's lonely at the top.
Outsiders with a commitment to the company can add perspective, problem-solving ability, expertise, strategic thinking, and a network of contacts that complement those of an able CEO and top management team.
Different visions of the future between generations and predictable differences between family members who are active in management and those who are not can be positively influenced by the facilitating, moderating, cajoling, and professionalism of a board.
Conditions Necessary for an Advisory Board to Be Effective
CEO/family must be willing to share information (e.g., financial information, business plan).
The CEO must make board members feel welcome, be willing to involve them in the business, be honest with them, and expect them to be loyal critics, not a rubber-stamp board.
The CEO and board members must do their homework - they must be prepared for meetings and be available for follow-up action and ongoing coaching.
What an Advisory Board Can Do for a Family Business
Assist in planning
for the future
Provide help with objective financial analysis,
its review, and its implications
Assist with strategy and product/service development
Help the CEO establish and review goals (but not set or dictate goals itself)
Suggest ideas on how to make processes, relationships, etc., better
Assist in networking with CEOs and partnering with and benchmarking against
other companies
Help in choosing a successor
Hold CEOs, successors, and top management accountable
Meeting Schedules and Agendas
Typically, meetings are scheduled quarterly. The board is convened more frequently during growth or conflict.
The focus is on planning for the future, not rehashing the past.
Factual history and financial information are provided in materials prepared for the meeting; they are not rehashed in long discussions or presentations and so play a minimal part in the agenda.
| Ernesto
J. Poza.Family Business 2nd Edition. 2006. Thomson South-Western. p230. |
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CONFERENCES
FSF
|
| Who: |
Swedish
Foundation for Small Business Research
|
| What: |
The
EU as a Global Player: Benefactor,
Colonialist or Stabilizer?
|
| Where: |
Brussels,
Belgium |
| When: |
February
8, 2007 |
|
|
|
ASU
|
| Who: |
Arkansas
State University
|
| What: |
Identity
Solutions Symposium & Workshop
|
| Where: |
Jonesboro,
Arkansas, USA |
| When: |
February
21-22, 2007 |
|
|
|
CFOR
|
| Who: |
CFO
Rising
|
| What: |
14th
Annual Conference and Expo
|
| Where: |
Orlando,
Florida, USA |
| When: |
March
18-21, 2007 |
|
|
|
NVC
|
| Who: |
New
Venture Championship
|
| What: |
New
Venture Championship International Business Plan
Competition
|
| Where: |
Portland
, Oregon, USA |
| When: |
April
12-14, 2007 |
|
|
|
ICSB
|
| Who: |
International
Council for Small Business (ICSB)
|
| What: |
World
Conference
|
| Where: |
Turku,
Finland |
| When: |
June
13-15, 2007 |
|
|
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CALLS FOR PAPERS
CG
|
| Who: |
Common
Ground |
| What: |
The
Seventh International Conference on Organizations,
Communities & Nations
|
| Where: |
Amsterdam,
The Netherlands |
| When: |
July
3-6, 2007 |
Submission
Deadline:
February 10, 2007
|
|
|
|
CG
|
| Who: |
Common
Ground
|
| What: |
Fourteenth
International Conference on Learning - 2007
|
| Where: |
University
of the Witwatersrand, South Africa |
| When: |
June
26-29, 2007 |
Submission
Deadline:
February 10, 2007
|
|
|
|
IFERA
|
| Who: |
International
Family Enterprise Research Academy
|
| What: |
7th
Annual IFERA Conference 2007
|
| Where: |
European
Business School, Oestrich-Winkel, Germany |
| When: |
June
20-23, 2007 |
Submission
Deadline:
February 10, 2007
|
|
|
|
AA
|
| Who: |
Allied
Academies
|
| What: |
2007
International Conference
|
| Where: |
Jacksonville,
Florida, USA |
| When: |
April
11-14, 2007 |
Submission
Deadline:
March 1, 2007
|
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