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Practical approach towards Board of Directors
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February 2013 Slide 1©1
February, 2014Franky Van DammeManaging Partner, PSX [email protected]
Board of Directors, practical
February 2013 Slide 2©
Advisory Services
PSX focuses specifically on high-growth and mid-cap European Technology and Applied Technology companies
PSX focuses specifically on high-growth and mid-cap European Technology and Applied Technology companies
BOARDMEMBERSHIP
STRATEGICADVISORY
FUNDING
MERGERS &
ACQUISITIONS
SHAREHOLDERSALIGNMENT
February 2013 Slide 3©
Why do we need a Board Legal requirement To steer the Company To control the Entrepreneur
Define the Strategy Monitor the Company Risk Assessment
February 2013 Slide 4©
Members of the Board Investor (1..x) The investor friends Domain experts Advisors
Employees Entrepreneurs Management My friends
Chairman
A well balanced composition of the Board and an independent Chairman can make a huge differenceA well balanced composition of the Board and an
independent Chairman can make a huge difference
February 2013 Slide 5©
Who does what Board members “setting the goals”
Executives “getting the job done”
Skill set Different (Technology – Operational
Financial – Business development)
Local / International …
February 2013 Slide 6©
NThe next step
• Focus on the M&A - IPO process
• Monitoring the budget
E Evolution• Well balanced team• Agenda management• Strategy and direction setting
Investor
• We get formal meetings• Getting to know the company• Process in place
I
Trouble
• Lack of leadership by the chairmen
• Aggressive meetings• ….
T
FFFounders & Friends• Happy together• Explain to each other ….• Legally OK
The Evolution
February 2013 Slide 7©
The MeetingAgenda
Minutes Business Update Financial / Reporting Clients Market and Competition IP Risk Assessment Product Portfolio Strategy Human Resources AOB
Approach Present / explain Options and proposals Discussion Decision
Subject Indication of timing Type, for… (information / discussion / decision) At the end…check draft minutes
February 2013 Slide 8©
What works …Monthly
A Business Reporting pack (max 15 p. with max 3p. descriptive) A Financial Dashboard
Before the Board meeting Send out all relevant material (including the Financial and
Business info) Ask to get questions related to the Financial and Business info
beforehand Prepare the meeting with the chairman
The Meeting Start with a breakfast or sandwich lunch (late arrivals) The chairman has to lead the meeting Respect the timing Make use of a secretary for the minutes (crisp and clear) Frequency of 6 – 8 meetings
With additional telephone conferences or specific meetings
February 2013 Slide 9©
Additional Committees When
Investor on board Stage of the company
Which
Finance/Audit Committee permanent Accounting policies Defining the financial/business reporting pack Authorization levels Screening the budget figures Internal control Preparation of the yearly financial figures Interface with the auditor …
February 2013 Slide 10©
Additional Committees (2) Human Resources/Remuneration Committee permanent
Defining the remuneration of the executive and non-executive directors
Overall compensation and benefits policy Stock option plan Hiring/firing process Personnel evolution process …
Strategy Committee temporary
Define the strategic objective
Analyse the Order Intake, Clients, Products,..
Get info about the competition and the market
Investigate different scenario’s
Propose the way forward
…
…
February 2013 Slide 11©
Some Cases
Profit
Revenue
DeclineMaturityIntroduction Growth
Course of Time
Re
ve
nu
e o
r. P
rofi
t
Development
U
AC
B SB
B
T
D
February 2013 Slide 12©
The Boardroom atmosphere
Exit
EquityChange
Strategy
Problem
Start
Panic
People’s behaviour might change in line with the stage of the company
Be aware that the Executives know the business Board members are learning the business (in most cases).
Some board members might have no operational business experience.
An Aligned and Effective Boardwill add Value to the Company
An Aligned and Effective Boardwill add Value to the Company
Not everybody has experiences in different kind of companies.
Some people could have difficulties with their day to day role and being a Board member.
