![]() managing the business through unexpected crises.deciding emotional subjects like directors’ pay, share options, company car policy, and general payment issues.laying off employees or asking a fellow director to resign.Without non-execs, there is a tendency to carry on doing the same things the same way, without looking at alternatives.ĭraw on non-execs’ experience and objectivity to help take tough decisions.They should give their honest opinion of new ideas. Non-execs should have no axe to grind and no fear of upsetting their board colleagues.The stronger the other personalities on the board, the stronger the non-execs’ characters need to be.Recruit non-execs who have the right character planning the succession of executive management for a business.counteracting board weakness in a particular area.bringing in outside experience from other companies and industries.providing an independent overview of the business strategy.Consider the role non-execs could play in your businessįor example, they can be particularly effective in: Non-executive directors (‘non-execs’) can make a board considerably more effective, at a low annual cost. the shareholders’ representative, who has little business experience.the chairperson’s friend, appointed as a non-executive to strengthen the chairperson’s own position.the long-term manager, appointed as the only means of promotion.Resist pressure to appoint unsuitable people to the board This is the first step in getting the board to work as a team. Opinions will vary considerably, but you can then come to a workable agreement.Ask each board member to write down his or her views. ![]() To be effective, the board should agree on the objectives and scope of board meetings put the company’s best interests ahead of their personal best interests.contribute to discussions outside their main area of expertise.think strategically, with a long-term view and a level-headed, realistic approach.Similarly, blend optimism with pessimism, and experience with youth.īoard members should be selected on merit.For example, if you plan to expand, find someone who understands the financial implications.listen to all opinions and speak honestlyĪ team with complementary skills contributes to sound decision-making.command respect from fellow board members, shareholders and employees.While the managing director runs the company, it is the chairperson who runs the board. Each board director’s role should be agreed in the first place. Take full advantage of non-executive directors as a source of alternative approaches to problems and opportunities.Ĭhoosing the right mix of people creates an effective board.To use non-executive directors as sounding boards for new ideas codes of conduct (eg the rules set up by your trade association).declaration by directors of possible conflicts of interest.legislation, such as the Companies Act and health and safety law.To monitor financial performance against the budget To make sure procedural and compliance issues are properly dealt with For example, a consultancy business may be taking on many small projects, despite its agreed strategy of concentrating on fewer, larger projects.To make sure that company operations are in line with strategy ![]() The changes occurring in the industry and marketplace.The strengths, weaknesses, opportunities and threats relevant to the business.In a more mature market, it might be cost-efficiency. For example, the key driver for a manufacturing business might be product innovation. ![]() The board can then provide first reactions and direction. The management should present strategy proposals at an early stage in the planning process. To agree a strategy and assess its effectiveness Typically, board meetings have five objectives. ![]() Done well, board meetings help a company to work out a business strategy and execute it successfully. ![]()
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