Governance for Growth
Posted by Dr. Earl R. Smith II in Governance, tags: adviser, advisory board, angel investor, board of directors, CEO, chairman, coaching, consulting, director, earl r smith ii, earl smith, Executive Coaching, federal circle, federal contracting, funding, Governance, government contractor, investing, investment, investor, Leadership, leadership assessment, leadership coaching, leadership development, leadership styles, management assessment, managing partner, Personal Growth, the federal circle, turnaround, Turnaround Management, Venture CapitalDr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com
Good corporate governance is challenging in the fast-paced, ever changing, business environment of today. Directors are expected to be coaches, inspiring orators and have a leadership style that embraces personal growth in themselves and others.
Corporate directors must have a wide-ranging knowledge base, an understanding of the regulations governing corporate operations, and sound business judgment tempered by experience. Directors, more than ever before, need to embody good corporate ethics, and adhere to the corporate culture. Through it all, directors are accountable for establishing an atmosphere of growth for the company.
Growth sounds like the goal for all companies. However, growth comes with many issues. A company with a weak succession committee can outgrow its leadership quickly and ruin an otherwise healthy company. A company with a weak or poorly skilled finance committee can grow beyond its means and seem healthy for months only to find itself strapped for cash and even bankrupt. Growth must come out of a strategic plan, and the CEO and Chairman must ensure the necessary infrastructure for growth is in place including:
Corporate finance
- Line of credit
- Supply chain credit
- Collections procedures
Assets
- Equipment time
- Warehousing space
- Maintenance ability
Logistics
- Warehousing plan
- Raw materials storage plan
- Transportation plan
Leadership
- Leadership style
- Leadership development
- Advisory board development
- Appropriate governance model
- Appropriate governance structure
Of the list above, the most important is having the leadership infrastructure in place. Many companies have organized leadership coaching programs that help their rising stars and more established executives hone their leadership skills. Leadership coaching can also benefit the board of directors. The directors should have leadership styles that emphasizes and focuses on the future. The CEO and the Chairman must have a temperament prepared to deal with rapid change. The CEO and his corporate management must have a leadership style comfortable with coaching for excellence and becoming involved with the personal growth of the future leaders of the company. Grooming the future leaders will develop important skills leading to high performance immediately, as well.
Directors must inspire others from the CEO down to believe in the possibilities of the future direction the board of directors is leading the company. The board of directors must tap the CEO, a skilled board member, or an outside marketing firm to deliver a consistent, energetic, message that demonstrates the commitment of the board to the vision of the company’s future. The message must inspire the employees to embrace the plan as vehicle for growth. Corporate management must offer its assessment of the plan and commit to coaching, personal growth and providing the resources to the company employees to achieve the goals of the plan.
Leadership must encourage excitement among the employees and management of the company, but the board must remain sober. Audit committee members must continue to review the company’s compliance with regulations and with the Sarbanes-Oxley Act. The finance committee must guard against sales outstripping cash-flow or collectibles dragging beyond acceptable limits. The board must hold corporate management accountable for exercising disciplined management during the excitement of rapid growth.
Growth is a natural tendency. It happens to all of us, companies included. A rapid, strategically planned growth phase for a company can be exciting and rewarding, but the board of directors not only has the responsibility for planning such growth, directors have the responsibility for maintaining profitability and compliance management. The CEO is charged with execution of the plan. The directors must be involved with energizing the company and creating excitement about the plan. Ultimately, the board must exercise its oversight responsibility and safeguard shareholder value.
© Dr. Earl R. Smith II
Related Articles:
- Developing Visionary Leadership – Board Contributions
- Corporate Ethics and Good Governance Leadership
- Board Governance – Engaging Leadership
- The Succession Committee – Selecting Leadership for the Future
- Assessment Programs – Important Governance Tools
Dr. Smith is Managing Partner of The Federal Circle. The Federal Circle partners with teams and existing companies. We help them up their game and win big in the Federal space. We also arrange funding for acquisitions and expansion by acquisition. Our model is based on the belief that, if you select the very best and work with them in a highly professional and focused manner, the results will be truly amazing. He is the author of Amazing Pace: Turbo-charged Business Development – a book that shows how Advisory Boards can dramatically increase revenue. Dr. Smith is also the author of Dream Walk: Parables for the Living – a book of Raven Tales and exploration.
Entries (RSS)