In truth I suspect the answer is not as deeply as perhaps you should. Board structure, composition and how the Board goes about its business are the bedrock of the governance of your company.
If you are facing a period of challenge, your funders and other partners may prefer to see that your Board make up includes an independent non-executive director(s) and possibly an independent non-executive Chairman.
When I led the MBO of a privately held £40m automotive component business, I decided very early in the process to appoint a Non-executive Chairman. Each member of the buy-out team was the current company head of function. I was the incoming BIMBO CEO.
I decided to invite someone for whom I had great respect, who was just leaving a corporate Divisional CEO role and for whom I had recently worked (14 months on assignment in France) to become our Non-executive Chairman.
I knew the chemistry between us was good, that our skills complimented each other and that his style would bring discipline to myself and my colleagues as we took the business forward.
And so it proved. Our prospective funder immediately gained confidence from the appointment, our OEM customers soon came to recognise that any difficulties we faced would be subject to rigorous internal review and his personality, style and sense of humour helped diffuse many a tricky high level meeting and negotiation.
But the importance of this appointment came sharply to the fore after the Lehman shock. Our key OEM customers more than halved their demand, we went from 500 employees to 240 in just three months, our pension deficit ballooned and our funding partner seemed rapidly to have fallen out of love with manufacturing.
During this period as the functional Directors and I tackled the hard reality of sizing the business to the prevailing demand scenarios, our Non-executive Chairman stepped in almost full time to give us support and sage counsel as we fought to survive.
At such times of challenge it is vital that a Board regularly meets, has a proper review of the business and takes minutes of the key discussions and resolutions.
But as we expanded again through diversification into industrial products, a JV in Turkey and a technology manufacturing agreement with a company in Japan; our business greatly benefited from the scrutiny an independent Chairman brought to our strategic thinking and the Board’s subsequent review of its execution.
As the majority shareholder I was under no obligation to appoint or seek a Non-Executive Chairman for our Board. I know first-hand the value of a proper governance structure when challenges emerge. A Non-executive Chairman was able to steer our debate and made sure all the voices around our Boardroom table, whatever their shareholding, had an equal opportunity to contribute.
So take a look at your Board composition and consider how adopting a governance structure might be a step towards helping your business grow.