Is your board helping or hindering growth?
Wadds Inc. supports creative agencies with company direction and differentiated propositions. In the first of this three-part series, we look at how a wrongly structured board or no board at all, can be a real barrier to growth.
SMEs pushing for growth sometimes scale without the proper processes in place, which can result in dysfunction across the organisation. A board is often established without the appropriate structure and make-up. This is where formal training and the input of a non-executive director can be hugely valuable.
When board decision-making revolves around operations and immediate concerns rather than purpose, values and strategy, the focus is skewed, and talent isn’t used effectively. It’s a trap that creative consultancies can easily fall into. But it is also one that can be easily fixed by introducing more robust governance.
Board vs management
Ultimately, the board's role is to consider long-term sustainability through value creation and resource utilisation, and to ensure regulatory and legal compliance.
The chair and non-executive director provide external focus, with the internal perspective provided by the managing director (or CEO), finance director and any executive directors reporting to the MD.
Implementing policies, strategies and business plans should be delegated to management, with board monitoring progress.
Get the balance right
The makeup of the board is more important than you think. Get the balance wrong and it can be dominated by one personality or group think. Conflict-averse ‘yes men’ (or less often women) or a lack of debate can see the wrong decisions agreed.
Lasting damage can be caused by:
- Poor decision-making due to inadequate information
- Infrequent reviews of finance arrangements
- Weak or no evaluation of board members and decisions taken
- A lack of focus on succession, R&D and business development
- Not listening to any standing committees where these are in place
If you’re on a board, it’s your ethical and legal responsibility to avoid these issues and whistleblow where any serious governance breaches are suspected.
As Helen Kenny, the Chief Operating Officer at Manifest Group says, having a non-executive director involved can be revolutionary:
“Introducing non-executive directors to our regional and global leadership boards has been utterly transformative.
“Having that outside perspective ensures we stay zoomed out and focused on the bigger picture and that we prioritise our strategic imperatives, rather than getting caught up in operational niggles or the challenges of the day.
“With the majority of our global leadership team being in their first leadership role, the consultation from Sarah at Wadds Inc. has helped harness their talent, drive and passion and foster a productive leadership team which can make strategic and actionable decisions that we’re collectively accountable for.”
In the next article in this of the series, we’ll look at ways to evaluate the board to ensure it is performing effectively.
If any of this resonates and you’d like professional advisory support to help structure your business and achieve your growth plans, please email sarah.waddington@wadds.co.uk or stephen.waddington@wadds.co.uk, and we’ll be happy to help.