Unless you’ve been living under a rock for the past decade, you have heard of the term “outsourcing” or some variation thereof (e.g. near sourcing, co-sourcing, off-shoring, etc.). Fundamentally, they all mean the same thing – basically, it’s “viewed as involving the contracting out of a business function – commonly one performed in house – to an external provider”.
Outsourcing, when used correctly, can yield tremendous benefits – some financial and sometimes more importantly, some intangible benefits, such as peace of mind.
It’s no secret that I believe having a board (of directors / advisers), formal or not, is critical to a company’s success. As in life and in business, perspective is key when making important decisions and having someone who has your (or your company’s) best interest in mind, is a valuable resource.
As I was reading yesterday, I came across some great information about questions that a board must ask to really gauge the state of a company. If you are a CEO who has a board and they are not asking these questions, maybe you need to augment your board (or, find new members all together). If you are currently a board member and not asking these questions, you need to start.
Regardless on which side of the table you sit, these are critical questions that require considerable thought. Granted – some questions may not apply to all businesses but, if nothing else, maybe asking some of these questions today will position the company on a successful track thereby allowing you to ask the remaining question later?
Okay – so let’s be clear on what a “board of directors” is. According to Wikipedia, “A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. The body sometimes has a different name, such as board of governors, board of managers, board of regents, board of trustees, board of visitors, or executive board. It is often simply referred to as “the board.”
All right – that’s done… so, let’s try to answer the question: Does a startup need a board of directors? The answer is… it depends. To be more clear – it depends on what stage the “company” is in specifically relating to its idea or product.
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