How a board can help
A board can help grow and develop at a pace that suits the owner, staying inside the speed limits, or accelerating to full throttle.
Governance applies to all companies, but not all in the same way. There is no set route to follow, but most companies face similar issues, such as:
- the need for capital injections
- maintaining and expanding market share
- innovation and risk management
- managing debt and stakeholders.
Driving a well-tuned car is a joy. Winning a race is invariably a team effort. You might try to do it on your own but success is more likely with the right support crew.
Wayne Norrie knows how to drive
Wayne Norrie has around 30 years IT industry experience and has worked in New Zealand and off-shore in technical, sales, management and governance roles. Wayne is a regular speaker for the IoD. Wayne is a Chartered Fellow of the IoD and thinks he knows a bit about driving.
(Taken from an interview with Wayne Norrie)
Driving a better business
Running a business is a bit like driving a car, very fast and at night. Your headlights only show you what's 50 metres ahead, but you have that uneasy feeling that somewhere out there in the darkness lie a number of potholes and other hazards that could damage your vehicle or, worse, send it careering off the road altogether.
A board of directors is like a team of navigators using floodlights to help you anticipate what lies 500 metres ahead. The board members have been down similar roads before and know what obstacles and hazards might be encountered. They will help you steer round them. Or they may advise you that now is a good time to take more fuel (capital) on board.
The directors help identify the obstacles that lie far beyond the reach of the headlights. You're still doing the driving, but they're making the journey with you and helping navigate a safe passage. It's good to have them along, at all times.
Even when times are good and your business is making satisfying progress, you can canvass your navigators' views to help you explore and set the company's future direction. You get the chance to discuss the itinerary – your aspirations for the business – with trusted peers and mentors whose opinions you respect (even though you may not always agree with them). With their input, your company may be able to change gear or take a new direction.
Getting the right signals
As well as seeing where you're going, you want to have confidence that the lights on the dashboard are giving you the information you need to drive the car safely and achieve its best possible performance. That's where the good governance provided by a board kicks in – it makes sure that performance is maintained and improved, without affecting the day-to-day requirements of keeping the business going. Governance puts sound business practices and forward planning in place so that your business stays in good running order, meets all its legal obligations, and heads in the right direction, rather than straying down a dead-end track. In short, good governance = better business.
Regardless of the business size the basics of governance remain the same:
- to decide or review the direction the business is travelling
- to identify what strengths, weaknesses, opportunities, threats and risks may affect the journey the business is taking
- to manage the risks by ensuring they are measured and monitored
- to make sure the business is performing as it should.