The Benefits of an Independent Director to Your Business
In my work as a business consultant specialising in business profitability improvement, strategy and restructuring, I work with organisations that range from small to medium to large enterprises. These businesses are often privately owned by a family or a number of individuals. The owners are involved in the day to day running of the business and work with management teams that they have recruited or promoted from within their existing team over time.
The management teams may meet formally as a Board of Directors or have a management meeting periodically to discuss the businesses operations. Often or not these meetings are informal and irregular and are often crisis driven and only held because they have to be. Some businesses have successfully functioned in this manner for years but from my experience have rarely reached their full profit and growth potential which ultimately undermines the long- term value of the business.
The management team and owners often lack objectivity as they are too close to the day to day running of the businesses operations.
Many businesses have skill shortages in particular young and small companies where the owner/manager and management team have to do everything as they cannot afford to employ the appropriate people with the required skills on a full- time basis.
In such situations I often recommend the appointment of a part time Independent non-executive Director. In some businesses in particular family or jointly owned and managed Businesses I would recommend that this person is appointed as Chairman. The independent Director/Chairman are highly skilled managers with years of experience and will work with the business on agreed number of days per month/ per year and can assist the company with specific projects or issues that need to be dealt with as and when they arise. The Director/Chairman will not only bring experience that will benefit the business but more importantly will bring skill sets, objectivity and an outside perspective on decisions and on how the business is run.
If you have invested in a business but are not involved in the day to day running of the business, you may benefit from appointing a Director of your choosing (if permitted under your investment/shareholder agreement) to monitor how the business is run.
If you require further information on how an independent Director can benefit you and your business please give me a call and we can discuss further. At Tom Murray and Associates wecan provide you with independent highly skilled Directors that will assist you in maximising your businesses profit performance and maximise its value. So, call me today and we can discuss how we can help you and your business to thrive.