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Archive - 16/02/2015

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Does my business need a Board of Directors?

Does my business need a Board of Directors?

Larger companies have Boards of Directors to provide governance over the company. The question is, does your small or micro-business need a Board?

Boards of Directors have different roles from company management. Directors provide a layer of governance while management provide the leadership over the operations of the company. Directors provide strategic oversight not operational management. Directors set the company’s strategic goals, vision and direction, its limitations of purpose, and the accountability frameworks, and assess management’s performance in following strategy and accountability. Management on the other hand oversee the day to day operations and allocates resources in the pursuit of strategy.

Clearly larger corporations need this distinct role, especially if they report to shareholders who do not have a working knowledge of the day to day operations of the company. In this way Boards provide transparency for stakeholders.

On the other hand, in a small business that is owner-operated, the manager is usually the owner, and they may also be nominally “on the Board” if the small business is incorporated. Other micro-businesses may not even be incorporated and may only have family members as employees. Do these businesses need a Board? Read More

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