• About Us
  • Advertise with Us
  • Contact Us
  • Events
  • Newsletter
  • Podcasts
  • Digital Magazine
  • Home
  • News
  • Opinion
  • Entrepreneurship
  • Self Development
  • Growth
  • Finance
  • Marketing
  • Technology
  • Sustainability
  • About Us
  • Advertise with Us
  • Contact Us
  • Events
  • Newsletter
  • Podcasts
  • Digital Magazine
NZBusiness Magazine

Type and hit Enter to search

Linkedin Facebook Instagram Youtube
  • Home
  • News
  • Opinion
  • Entrepreneurship
  • Self Development
  • Growth
  • Finance
  • Marketing
  • Technology
  • Sustainability
NZBusiness Magazine
  • News
  • Opinion
  • Entrepreneurship
  • Self Development
  • Growth
  • Finance
  • Marketing
  • Technology
  • Sustainability
Business

Scaffolding for your business

Dr Mike Ashby highlights the value that a good board can offer a business owner.

NZBusiness Editorial Team
NZBusiness Editorial Team
May 18, 2015 3 Mins Read
1.3K

Dr Mike Ashby highlights the value that a good board can offer a business owner.

If we’re smart business owners, we will realise that we really don’t need to do this on our own. In fact, it’s not even a good idea to do this on our own. The research is clear: nearly all companies that get from small to medium and more had outside help.

Think of it as the scaffolding you need around your business to build it from the outside.

The reason we need scaffolding is because the first casualty of business ownership is objectivity. We get attached to certain ideas, people, and ways of doing things. We get so attached to our opinions that they become beliefs, and beliefs can be a luxury in a fast-changing market.

It’s a good idea to get as much help as you can in forming and changing those opinions. A powerful way of doing that is to upgrade your governance.

In this context, governance refers to stewardship of the company, as distinct from management or ownership. Normally, owners are also directors of their company, but it’s not a role they play actively. It tends to sit behind their roles as manager and shareholder.

Governance is about access to regular independent, objective advice. It’s another vehicle for that bright light, clear mirror and kick in the pants we all need.

Governance doesn’t necessarily entail a full board of directors with all the trappings of public companies – it also includes advisory boards. The difference is that full boards carry legal obligations and fiduciary responsibilities; advisory boards can provide the essential functions of a board without the obligations.

Stages and sages
Every organisation tends towards myopia and inertia. For us as business owners this means that the forest presents as a whole bunch of trees, all with their different issues and problems. We get emotionally and/or mentally over-invested and attached to particular trees. We develop a very inside-out view of our business and the world.

A board with independent directors or advisers has the advantage of bringing the outside in, offering a different perspective, independent of our attachments. The discipline and structure of the board process forces us to articulate our issues and perceptions to someone not as familiar with the business as we are – that generates insight (new ways of thinking about what we know).

The time to think about getting a board is when you’re coming up against big strategic issues and you need to tap into people with wider and higher experience in your industry; when you feel like you need someone who can challenge your thinking, and/or have more formality in your thinking about the business. You achieve this through the regular reporting and planning that goes with having a board.

But here’s the thing. In my experience it takes a considerable act of humility in an owner to say “even though it’s my company and my money, I’m still prepared to put the decision-making power with this board which includes outsiders”. It’s a bit of a legal fiction – the owner, as major shareholder of a private company, can fire the board anytime. It’s just like any law is a bit of a fiction – there’s no reason to obey the law other than that we agree to subject ourselves to it and its enforcement.

Good directors are conscious of their status – they’re there at the mercy of the shareholders who they might be disagreeing with in a meeting. But in a way, that tension is quite helpful. I’ve been involved in a few boards like this, and I’m acutely conscious that I have to be constructive, I have to choose where I make a stand, and guided only by the best interests of the company at heart.

I think it’s a healthy tension to know that I could get fired if I annoy the shareholder too much, but I could (and should) also get fired if I don’t annoy them at least a little bit by saying things they don’t want to hear but really need to think about.

The value a board creates for the business is partly a function of directors getting that balance right. But really, a board will be as good as the owner allows it to be.
If you do not value being challenged, if you cannot concede that there might be another way of looking at things, if you don’t think it’s possible that you might not have thought of everything, don’t set up a board of any kind.
 

Share Article

NZBusiness Editorial Team
Follow Me Written By

NZBusiness Editorial Team

NZBusiness is a team effort, with article submissions curated by a small team of professionals under the guidance of Editor David Nothling-Demmer.

Other Articles

Sorbet-09_0
Previous

Off to a solid start

09-Tiran-Behrouz-Profile-Picture_0
Next

Value for money currency exchange platform

Next
09-Tiran-Behrouz-Profile-Picture_0
May 19, 2015

Value for money currency exchange platform

Previous
May 18, 2015

Off to a solid start

Sorbet-09_0

Subscribe to our newsletter

NZBusiness Digital Issue – March 2025

READ MORE

The Latest

A business journey from surgeon to CEO

May 9, 2025

Entries open for 2025 Sustainable Business Awards

May 8, 2025

The new concrete flooring system that won’t end up in landfill

May 8, 2025

The business of saving lives

May 7, 2025

Breaking the mould

May 6, 2025

A business built to last

May 6, 2025

Most Popular

NZBusiness Digital Issue – June 2024
Understanding AI
Navigating economic headwinds: Insights for SME owners
Nourishing success: Sam Bridgewater on his entrepreneurship journey with The Pure Food Co
Navigating challenges: Small business resilience amidst sales decline

Related Posts

Sorbet-09_0

Off to a solid start

May 18, 2015
ThinkstockPhotos-166195708_0

The best partnership agreements start at the end

May 18, 2015
ThinkstockPhotos-507210067_0_0

Unlevelling the sales playing field

May 18, 2015
NZBusiness Magazine

New Zealand’s leading source for business news, training guides and opinion from small businesses to multi-national corporations.

© Pure 360 Limited.
All Rights Reserved.

Quick Links

  • Advertise with us
  • Magazine issues
  • About us
  • Contact us
  • Privacy policy
  • Sitemap

Categories

  • News
  • Entrepreneurship
  • Growth
  • Finance
  • Education & Development
  • Marketing
  • Technology
  • Sustainability

Follow Us

LinkedIn
Facebook
Instagram
YouTube
  • Home
  • News
  • Opinion
  • Entrepreneurship
  • Self Development
  • Growth
  • Finance
  • Marketing
  • Technology
  • Sustainability