Can You Leverage Your Business’ Growth? My answer is yes, immensely so, and in ways in which you likely have little familiarity as a lower middle-market business owner (or advising one). If you’re a family or other lower middle-market firm or larger, you can–and should (if you can effectively do so)– have two boards, one governance and one advisory and, even, perhaps, a third (family councils fit here). My reasons here are distinct from any legally mandated governance requirements you may have.The use of governance and advisory boards can, as my empirical research has shown, add immense value, though you should be aware that even public and large private company boards are frequently ineffective.
Lower middle-market companies characteristically don’t much employ effective Boards, whether governance or advisory. Yet my research has demonstrated, conclusively to me, that such Boards can and should not just boost the odds of simply surviving, but effective ones should also add,over time, one of or both immense enterprise or equity value far and above what the company would otherwise likely be able to do without such Boards.
The mantle of leadership remains on a Company’s CEO and Chairman. A leader best leads by both having the right person in the right job at the right time and by supporting them and their leadership teams with the most useful tools available. The research, and my own experience, shows that Boards–teams of skilled men and women of character and competence–which are designed, implement, and led to support the leadership team is an overlooked, underused, and one of the most useful tools a Company’s leader should be using and whose effectiveness will be key in crises, in strategic decisions and actions, and in changing infrastructure.
Ed Rowny, who led the U.S. negotiating team in the Strategic Arms Reduction Talks (START) with the Soviet Union in the 1980s noted ( in his You Tube video a few years back at the young age of 96) that a leader’s toughest decisions come in three categories. Easiest are decisions in crisis: limited time, limited resources, and a deadline. Next are the strategies to be employed; success depends upon choosing and executing viable strategies. The toughest are organizational because competing interests, fiefdoms, and the weight of an organization’s history interfere with development.
Effective Advisory Boards–Governance and Advisory–are a key to all three.
If Business Legal Counsel about this subject is sought, my custom packages should prove useful. If a specially designed, implemented and led advisory board is sought, I’ve established an affiliate, www.Hubbard BusinessSAE.com, for such purpose.