The legal aspects of Boards differ from country to country and in some cases from State to State. There are LLCs and Corporations, Listed and Unlisteds, Limited Liabilities and Partnerships or indeed Limited Liability Partnerships. In France a quick Google tells me you can have SARLs, EURLs, SELARLs, SAs, SASs, SNCs. The list goes on and on. Spend too much time looking at it and you start wondering whether it isn’t maybe time for the Good Lord to send a flood and wipe the slate clean again so we can start over. It would certainly provide a different answer to a joke told to me over my first business trip lunch in the US: “what do you have if you have nine lawyers buried up to their necks in sand?” Answer – “not enough sand”. And the guy telling the joke was a Corporate Lawyer. I guess water would do the trick too. – I guess I didn’t pay enough to get all the options.
But let’s forget all that jazz. Let’s get back to basics. If you weren’t (or even in some lucky circs aren’t right now) legally required to have substantive Boards of any description and you, the management team, owned the entire business and you didn’t bother to do anything like a Board what two things would you be missing out on?
Interestingly there are three test cases for this.
Early stage Startups generally don’t bother with Board meetings (beyond their accountant sending them some documents every year which they sign and pretend a Board meeting happened).
Listed MegaCos are so circumscribed by a million and one laws and regulations that, like Gulliver, they are tied down by so many Lilliputian threads that many have set up Advisory Boards where no laws apply and they can just Do What They Want. Which is a real luxury in a post-Palpatine world (“the bureaucrats have taken over”).
Finally one can go centuries into the past – amazingly enough there was a time when there was no Company Law… Bliss was it in those days to be alive. Well it was unless you needed a dentist. When it wasn’t so blissful.
So what do we find that a Senior Forum in a business provides – which of course will be the core of Boards even if by now buried deep in a pile of papers [surely “folder of pdfs” Ed.]?
First a metronomic strategic forum. When I went indie 22 years ago I moved from being Global Head of Risk – a role both super-strategic (along with the Chairman, CEO and FD I reviewed annual business plans) as well as super-tactical (being part of all large deal approvals). I moved to being me. So there was no reason why I couldn’t have continued with my in-built balance between strategic and tactical. And indeed I started that way. But before long I realised a maxim that every startup founder – even if they have a strategic background – soon finds. The tactical crowds out the strategic – it’s always more pressing.
You can say you will do it just as you can say you will go to the gym but there’s always a rider “if I have the time”. And in the busy life there never is time. You know how to do gyming – you go metronomically and it becomes a habit and you are in a place where you just do gyming. It’s possible but not easy to gym at your desk and in the same way it’s not impossible to think strategically at your desk – it’s just not designed for that. So with gyming and Boarding metronomically is the answer. Just do it.
The absence of taking a strategic overview of the business is exactly the same as having no General in a battle. It’s fine for a while but entropy, Brownian motion and the sheer lack of a plan and relevant updates made from the clear oversight of a hill way above the battlefield starts to kick in. Just as it will in a startup busy hacking its way through the jungle. Before long they’ll meet a path they’ve already hacked through before.
The second thing that one will miss out on (and many partnerships do today) is folks from outside who live in other forests and can far easier see your wood from your trees. You are surrounded by trees so you find it that much harder to see your wood. As they live in different lands they furthermore bring you different stories, takes and experience. They can introduce you to other woodsmen with whom you can cooperate. They can support and challenge you and from afar its easier to see when you need one and need t’other. And ideally with their bigger picture view they might on a good day spot trouble approaching just over the horizon long before you do.
Inverting all this you do have Boards today.
Just make sure that you leverage the metronomic strategic discipline. Make sure that there isn’t a triumph of form over content. Don’t let substance disappear in a blizzard of process and of documents if you are a MegaCo. It’s always a business that you are running and there are no laws or regulations that tell you how to do that profit thing.
And don’t forget to take the opportunity to invite some other experienced woodsmen into your camp once a month or once a quarter. Invite the right woodsmen and it will do you a world of good.