Ac­count­abil­ity has big role in­busi­ness

The Tribune (NZ) - - COMMENT OPINION -

It’s not a good look for the owner of a com­pany to put their feet up on the desk and ex­pect ev­ery­one else around them to do all the work. Own­ers need to do their bit to en­sure their com­pany’s suc­cess. But who makes sure the owner is ac­tu­ally do­ing a good job? Who keeps them ac­count­able?

In most com­pa­nies, own­ers are ac­count­able only to them­selves. They can ba­si­cally do ex­actly what they want, when they want. This is cer­tainly the case in the early stages of a business as the owner drives things along and is in charge of nearly ev­ery­thing. But as a business grows, it be­comes more com­plex, the fi­nan­cial risk in­creases and the fu­ture strat­egy be­come more in­volved. When this hap­pens, the business can quickly out­grow the ex­pe­ri­ence and knowl­edge base of the owner.

When you find your­self run­ning out of ideas on how to con­trol and grow your in­creas­ingly com­plex business, it’s time to get oth­ers on board. You need a brains trust to help you un­der­stand what is hap­pen­ing in the business and the mar­ket so you can de­cide what to do.

This is where an Ad­vi­sory Board be­comes use­ful. Own­ers can sur­round them­selves with peo­ple who have ex­per­tise they lack. After all, no-one can know ev­ery­thing. A good leader knows what they don’t know and finds peo­ple with the knowl­edge and ex­pe­ri­ence to fill the gaps. Run­ning a business can be dark and lonely work and it’s re­as­sur­ing to be able to share the load with a group of peo­ple you can trust.

In most com­pa­nies, own­ers are ac­count­able only to them­selves. They can ba­si­cally do ex­actly what they want, when they want.

The pur­pose of an Ad­vi­sory Board is to mon­i­tor and in­ter­pret the fi­nan­cial in­for­ma­tion monthly and de­bate the is­sues fac­ing the business. Ad­vi­sory Board mem­bers pro­vide a sound­ing board for own­ers to bounce their ideas and fu­ture strat­egy off.

Own­ers can see through the eyes of oth­ers how their de­ci­sions have im­pacted or will im­pact on the com­pany. A group of ex­pe­ri­enced and in­ter­ested business peo­ple can con­trib­ute a per­spec­tive which should en­sure poor de­ci­sions are made only once or not at all.

Ad­vi­sory Board par­tic­i­pants do not make de­ci­sions – this is the job of the owner. They ask hard ques­tions, make sug­ges­tions and de­bate is­sues to en­able own­ers to make well-in­formed, bet­ter qual­ity de­ci­sions. The dis­ci­pline of re­port­ing each month to an Ad­vi­sory Board also main­tains struc­ture and ac­count­abil­ity.

An Ad­vi­sory Board is a good first step to even­tu­ally es­tab­lish­ing a Gov­er­nance Board of in­de­pen­dent mem­bers who col­lec­tively and demo­crat­i­cally make de­ci­sions about the strate­gic di­rec­tion of the com­pany.

Grow your business to its full po­ten­tial in 2016 by sur­round­ing your­self with peo­ple who know what you don’t know.

PHOTO: FAIR­FAX NZ

To help stim­u­late business ideas and di­rec­tion it’s a good idea for business own­ers to draft in the ex­per­tise they lack.

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.