The Value of the Board of Directors

A strong, well-managed Board of Directors can add tremendously to a company’s value and assist it’s CEO in many ways. But many CEOs don’t capitalize on the true benefits a strong Board can provide to a growing company. In most cases, entrepreneurs choose Board Members from among their friends and family.

CEOs want a Board that they can trust to support their decisions and help maintain their control over the business. However, as businesses grow, CEOs need more than just loyalty from Board Members. Recruiting a Board that fulfills its fiduciary duties, while diving in and playing a key role in driving the business forward is a critical step that requires special expertise.

We’ve identified seven capabilities and contributions that Board Members should bring to a business:

1. Strategic Focus
While it may not be the task of Boards to actually produce the company’s strategic plan, it certainly is the responsibility of the Board to approve and support it. Too many CEOs try to tackle far too much and need to be kept on focus within the strategic plan.

2. Recruiting Talent
If your Board Members are well-connected, especially within your industry, they will be familiar with top talent. They should introduce, advise and assist you in seeking out top talent. Nothing is as important to the success of a business as the quality of its managers and employees.

3. Key Business Relationships
Board Members should be acquainted with Executives and key managers in your target markets. Introductions to potential clients, vendors, resellers, distributors and funding sources is an important factor that helps determine the success of many businesses.

4. Fundraising
Board Members should be integral to the fundraising process and should represent real dollar value (by increasing the value of the company in the many millions of dollars in some cases). This includes formal introductions to fundraising sources, attending meetings or conference calls for fundraising, and helping the CEO close rounds of funding by speaking with investors during the due diligence process.

5. Personal Competencies
When selecting Board candidates, many CEOs look to executives from within their own industry. It is very important that you recruit and maintain Board Members from multiple disciplines, with expertise in your industry, as well as, fundraising, finance, operations, marketing, etc. to have a well-rounded Board.

6. Short and Long Term Planning
While it is the responsibility of the Board and top executives to prepare the company for the future, it is also the responsibility of the Board not to lose track of the present. Board members must be involved in achieving results today that will support both present and future goals and prepare for an optimal exit.

Very few businesses have a succession plan, whether it is the selection and grooming of a follow-on executive or the identification and planning of an exit strategy. Unfortunately, most owners or CEOs choose Board Members based on expected loyalty or accept Members appointed by investors/stockholders. In doing so, they squander a chance to form and utilize a powerful business asset.

In summary, seek advice in recruiting a Board of Directors as a useful force for achieving the business’ goals rather than being a hindrance to success. There are other pitfalls to avoid, so seek experienced, professional help to take your business to the next level.

CEO Advisor, Inc. can research, formulate and recruit a Board of Directors that can create tremendous value while adding depth to your senior management team.

Contact Mark Hartsell, President of CEO Advisor, Inc. for a no cost initial consultation at (949) 629-2520, by email at or visit us at for more information.

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