Volume 7: Governance
Previous volumes focused on operational issues for starting and managing an organization. This volume addresses higher-level concerns involving external directors—usually handled by the CEO or Managing Director but affecting the entire organization.
Browse the articles below.
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This is an AI-generated summary of the thirteen articles in Chapter 7.01. This is an AI-generated summary of the nine articles in Chapter 7.02. This is an AI-generated summary of the fifteen articles in Chapter 7.03. Work closely with Boards of Directors, Advisors, Customers, and others as the business grows. An entrepreneur needs to develop a strong relationship with a mentor when they first start. Deciding who to add to the new company’s ecosystem is critical but not easy. Legal counsel will shift from providing advice to the entrepreneur to representing the company. There are many indirect or support functions that need to be added sooner rather than later. Many indirect or support functions need to be added sooner rather than later. The market is filled with individuals with outstanding expertise who are available on a part-time basis. Outsourcing allows a company to focus on its core competencies while leveraging others. Critical functions are often ignored with severe consequences encountered later. To be successful, recruit and engage with experienced individuals in different Board capacities. Using domain expert advisors can be the difference between success and failure of a startup. Customer Boards can provide unique insight into what to do now and in the future. Understanding how to operate under the supervision of a Board of Directors is critical. Maximizing the effective interaction with the Board is the CEO’s responsibility. The CEO and the Board Members should be aware of some common potential areas of conflict. Develop a simple, replicable template for Board Meetings to minimize the preparation effort. Coordinate Board Meetings early to avoid conflicts and follow a standard format. Boards need the CEO’s objective and candid assessment to provide effective guidance. It is the CEO’s responsibility during Board Meetings to set a positive, open dialogue tone. Successful Board Meetings require detailed preparation and management of the meeting flow. Develop a standard Board Meeting template to minimize prep time. Pre-merger communications often averts poor post-merger performance. Try to form a business partner relationship before pursuing a transaction. Each type of merger or acquisition will have a lasting impact on the new organization. Understanding each party’s motivation for pursuing a transaction is critical. Each controlling entity needs to ask and answer some basic questions about the transaction. Spend time in a detailed “get to know” session early in the M/A discussion. Poor employee communication during early transaction discussions usually results in failure. Employee communications with first-level supervisors or managers is critical. Management must recognize the negative feelings of employees when merger discussions begin. Management needs to address employees as soon as any M/A discussions begin. Increased levels of anxiety will be ever-present until merging activities are complete. Develop an overall communications plan to ensure consistency of the M/A messages. Provide an FAQ document to employees to replace rumors with factual information. The valuation of a company discussed in an M/A transaction can vary widely. Identify issues that could stymie an M/A transaction as early as possible in the discussions. The CEO is responsible for the cohesiveness and effectiveness of the Board of Directors.