This week i2E is featuring a series of posts from guest blogger Bill Botts, who is an i2E Entrepreneur-in-Residence from Henderson, Nevada. Bill will be in Oklahoma City on Thursday, March 3, to deliver a workshop on Corporate Governance for Entrepreneurs.
Why would a private company want a board of directors? The reasons are numerous why a majority of outside directors is desirable in even small private corporations.
I’ve boiled them down to a top 10 that should give all entrepreneurs a reason to consider putting together a strong board with a majority of outside directors:
- Provides ALL shareholders with representation — common, option holders, outside shareholders and investors
- Provides visibility and transparence through independent outside directors
- Provides the CEO with outside resources who are committed to helping the company, with different experiences than possessed by executive team
- Provides board level oversight relative to policy, financial activities and audits, financings and corporate strategy
- Foundation for the start of Corporate Governance program
- Brings executive experiences by others to the company independent of the company’s CEO and executive staff — been there done that resource
- Opens the door to business contacts that the company’s executive team may lack, including potential new investors and Venture Capital firms
- Brings potential access to new employees to which the executive team may not have access
- First step on the road to Sarbanes-Oxley compliance in the case of a future IPO or acquisition by a public company
- Provides a sophisticated and mature mage of the company by suppliers including D&O insurers, general insurance providers, bankers, business partners and others