What is a #Boardroom?
Well, that depends on how formal your view is of a sacred meeting, deliberation, and decision making place. Historically, a boardroom conjures images of deep wood paneled high ceiling rooms where wealthy men are deciding company policy and prices to monopolize a market or opportunity. In many ways, this notion is accurate but the Boardroom exists for many whose businesses and companies do not commit space to the formal use of an isolated room. In America, we have a capitalistic view that Boards are governed by archaic rules that have only a profit motive.
From a legal perspective, the boardroom and its function is extremely important. First, this is the place where the policy decisions are validated with people serving as "independent" board members thinking of the best interest of the shareholders although typical shareholders in larger public or private companies never attend board meetings. The prevailing exception is the C-Suite leadership which may or may not include the company founders.
In small start-up companies or small companies, the "Boardroom" could be a bench, a desk, or a virtual space (such as a ZOOM or WebEx Meeting), but when raised to a higher level of authority, accountability, and responsibility the discussions in the true corporate boardrooms are very similar to that of the small closely held business and for the same reasons; namely, it is the place where the decisions are made.
Why is this important to attorneys and their clients? This is because in Boardrooms and in preparation for meetings, deliberations, and discussions, many inside and outside people assemble information and data which informs the votes on matters and can also dramatically change the outcomes. Thus, as an attorney, the documentary and evidentiary record of what goes on needs to be considered and captured to defend, explain, justify or express the rationale behind company decisions and biases that effect the lives of customers, stakeholders, owners, and their families. While in one breath transparency is the catchphrase of today, the transparent organization may have difficulty competing if it doesn't maintain its competitive advantages and policies.
So where is your Boardroom?
- What policies written and unwritten exist to create your Board culture?
- What is the board culture?
- What is the role of management?
- What is the role of board members?
- How is data presented, shared, validated?
- Are their formal by-laws, minutes of actions, etc.?
- How do you record documents and keep sensitive information confidential among a need-to-know group, especially in the electronic information age?
Think about what your Boardroom is and what money you spent considering if you have the right boardroom(s) for your business.
This is an area where documents are written by attorneys to make the Boardroom and to protect the individuals affected by the decisions and also protect the decision makers so they get value from their roles and benefit the company through their service. Be planful.
Sage wisdom from professional Board members can create whole new businesses, seed the avoidance of business landmines, and navigate unpredictable outcomes for the better and help your business deal with accountants, financiers, bankers, litigation lawyers, auditors, and investors. The activity at and below the board level can significantly impact the views and oversight of regulatory bodies, at the township, city or village, state, national and international levels, and enable ways around difficult business problems or mollify the disasters that could happen. Providing to your management team a body politic that has the final say may provide cover for difficult choices that executives make while also vetting good options. No matter what size a business you have, a true board of directors, a board of advisors, a compensation team, or a group that oversees complicated issues can help a business and its executive teams thrive or realize that the best alternatives are to exit a business or close down an enterprise.
The boardroom is the executive conference room designed as the meeting place for the board of directors of a corporation or partnership. A typical boardroom may comfortably seat twenty, thirty, or even more individuals, despite the fact that the board roster itself is seldom that large. Especially in spoken communication, the word boardroom is also used metaphorically to refer to activities presumed to take place at the board level, whether within the boardroom or not. For instance, a boardroom decision is one that the speaker places responsibility for with the board of directors. Generally, only matters of the highest importance are regarded as boardroom matters, with day to day details of the business being the responsibility of management.
Boardroom Forums & Blogs
"Digging into what's really happening in boardrooms, the commission was able to examine what works and what the real-life challenges are for directors today," said Kenneth Daly, CEO and president of NACD. "The report offers a new way of thinking and is full of actionable recommendations that can be applied immediately in the boardroom."
Key recommendations from the report include:
- Risk is a team sport. Legislation percolating in Congress suggests that boards develop risk committees, but the report finds that delegating to a committee is part of the problem. The whole board should take ownership of risk oversight.
- The Board needs to help set risk tolerance. The board should consider how much tolerance it has for variances from its risk appetite, depending on market conditions as well as the potential risk/reward equation.
- Boards must take control of information flow. Boards may have inadequate information to do their job properly. Boards need to consider if new or different information could result in changed conclusions about the company's risk profile or the adequacy of its systems.
The boardroom today is anywhere you have access to conversations with people. That means you can be at the beach with your tax-deductible board meeting. The decisions that are made on the telephone or through texting, vote polls, or through general agreement is how you get policy and a practical decision made to advance your company.