The Entrepreneurial Director: An Uninvited Guest
- Tags:
- Board,
- Board Of Directors,
- Business Operations,
- Corporate Governance,
- Corporate Law,
- Director,
- Entrepreneurial,
- Ewing Marion Kauffman Foundation
- Source:
- Ewing Marion Kauffman Foundation
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Overview: By design, some inherent conflict exists between a board of directors and a management team. If the conflict is acknowledged, appreciated, respected and managed by both sides, it can produce extraordinary dividends for executives and directors alike, not to mention the company and its stockholders to whom both parties owe their ultimate allegiance. The paramount question that this piece asks is about the true role of an outside director, and how can one most effectively perform in that role. Formulating the right answer is critical, not only to the future of the companies that must make effective use of boards, but also to that of the American economy. With one exception, directors and officers share responsibility to the same parties, the first among them being the stockholders. An effectively functioning board presumes that all directors – including those who are also officers – understand that the board's responsibilities differ in some respects from that of the management team. If entrepreneurs or owners are going to make a realistic attempt at creating a legal board of directors, a minimum of two outside directors is an absolute must. This step helps eliminate the inherent conflicts and provides at least double the unique perspective on any given issue. When one puts together a board of directors for his own company – or are forced by investors to welcome an "uninvited guest" – one might not be pleased.
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Format: HTML | Date: Jan 2003 | Pages: 1
