Killer boards for small businesses

I hadn’t ever had a formal board before, and my father was experienced as a chairman of public companies.

So as CEO I decided the other founders and I, who were the directors, should meet quarterly with my father chairing the lot of us. Unsurprisingly, this was spectacular unsuccessful. We didn’t know what we wanted to achieve and my father’s experience was with mature large businesses only, very much focused on risk mitigation.

It’s disappointing for me to realise that since I was around 25, I have continuously been a director of a variety of small businesses, but up until recently didn’t have a clearer idea of what board should do for small business other than the general statement, help it grow. Therefore, there was relief and excitement at last Thursday’s Churchill Club meeting, after a comment was made by David Burden (recently CEO of the Webfirm Group Ltd and co-founder of Legion Interactive) that really “clicked” for me.

Forget accountants, marketers and lawyers, you can buy their services as you need. Forget industry doyens and professional directors, they are unlikely to be anything more than a distraction to a small growing business. What you want as a small business is additional directors that can help you with one or more of the following four tasks:

1. Grow revenues.
2. Raise capital.
3. Get the right people involved.
4. Exit the business.

If they can’t help you with one of the above tasks through their existing networks and assets, they’re just wasting your time.

Looking then at what you want from these potential directors, it’s pretty easy to then decide what their KPI’s should be (the outcome), how you want to remunerate them (fee for time, equity for success), and how long their tenure should be (until the job is done). It also makes it a lot easier to find them, because you now know exactly what you are looking for (people with large, useful networks and/or assets the business needs).

So despite the fact my father was a great Chairman, he was completely misplaced in a small business that didn’t know what it wanted. A waste of both his time and mine. And I didn’t even write that because he is likely to read this post!

Brendan Lewis is a serial technology entrepreneur having founded: Ideas Lighting, Carradale Media, Edion, Verve IT, The Churchill Club and Flinders Pacific. He has set up businesses for others in Romania, Indonesia, Hong Kong and Vietnam and is the sole Australian representative of the City of London for Foreign Direct Investment. Qualified in IT and Accounting, he has also spent time running an Advertising agency and as a Cavalry Officer with the Australian Army Reserve.