Introduction to Governance Volume 7

Quick Summary: Work closely with Boards of Directors, Advisory Boards, and Customer Boards.


While focusing on employees, partners, and customers, private companies need to consider other external groups that focus on certain overall aspects of the business.  Those groups can be divided into three categories: Board of Directors (shareholder representatives), Board of Advisors, and Customer Boards.  Each of these groups have separate and distinct roles and goals for the company.  Each can provide valuable insight to the company based on their unique perspectives.  Understanding the differences between these groups and closely working with each of them can significantly help a company be successful.

Perhaps this volume is mislabeled or the reader needs to think of governance in a much broader sense than just the implications of the term for public companies.  Its contents consist of a collection of articles that deal with various external aspects of the overall business.  The three chapters are focused on private company interaction with various boards and potential merger and acquisition issues that they may face.  For public companies, the term governance covers very specific issues. Many of those issues involve legal definitions, Security and Exchange Commission requirements, and other regulatory body considerations.  Although not targeted to public companies, the articles in this volume are probably an applicable subset of considerations that may be of interest to public companies. 

The three chapters in this volume are:

Chapter 7.01: Directors and Advisors

This chapter describes and compares the three different general types of boards:  Board of Directors, Board of Advisors, and Customer Boards.  All three serve important but distinct purposes and different goals.

Chapter 7.02:  Board of Director Interaction

This chapter deals with methods that should be employed when interacting with private company Boards of Directors.  For private companies, in their very early stages, board interaction may be very informal.  However, as companies grow and boards include professional financial investors including individuals representing angel investor groups, venture capital or private equity firms, or company strategic investor groups, the company-board interaction needs to change and become more formal.  Even with this transition, private company board meetings are still more similar to large company operations reviews than they are to public company board meetings.

Chapter 7.03:  Merger and Acquisition Considerations

It is not uncommon for private companies at all stages and sizes to consider or be presented with the opportunity to combine operations with another company.  That combination can be in the form of a “merger of equals” or an outright acquisition or some combination of certain aspects of either or both companies.  In most cases, the discussions are focused on increasing revenues and/or reducing costs.  Of course, these two factors will always be the top considerations.  However, the single-minded focus on these issues with the conscious or unconscious thought of “dealing with the other stuff later” is the undoing or failure of most transactions.  In most cases, if those “other” issues were resolved upfront, the results could be significantly more positive.  This chapter deals with the “other” issues, leaving the revenue and cost issues up to the investment bankers or outside management consultants to “resolve.”  The issues covered in this chapter require the involvement of the company management teams that have the intimate knowledge of the people and day-to-day innerworkings of the organizations.  “Outsides” can’t help.


The core material for all three of these chapters has been identified and outlined.  The corresponding articles will be released throughout the Fall of 2017.


Article Number : 7.010101   

A Handy Reference Guide for Executives and Managers at All Levels.

9 Volumes 42 Chapters ~700 Articles

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