Question: We are a private mid-sized medical device company with over $85 million in revenue. Why do we need an "active" Board of Directors?
Answer: You and your team have performed admirably to get to the level you are at. Most companies would be envious of your current ratios, debt-to equity, customer base, etc. Why do it the "hard way". A good Board of Directors are NOT the corporate police (albeit corporate governance should be a component of their responsibilities) or established to micro-manage the business. Their primary roles are:
- Candid broker of ideas.
- Ensure employees are the minority of the Board - get new ideas in a different setting.
- A board member should be able to bring "network of opportunities" to the table.
- Select members from areas where the company is not strong or plans strategic events in that area. For example, a M&A transaction may require a member with very strong M&A experience.
- Have a formal meeting - not just to satisfy corporate requirements - but to add value.
- Select member who can have a candid conversation and be willing to listen.