It is not always easy for small businesses to see the value of a board, to meet and review the business on a regular basis. In today’s world, particularly in financial services, I believe it is a valuable part of a good operating model.
A board is there to challenge and support, to add value and help the business to avoid making the wrong decisions. Not every idea works, but if successful then everyone will realise the value of the board decision and if it fails, understanding how it could have been done differently often leads to future success. Experience is a wonderful thing, but in order to gain that experience you have to learn from your mistakes to ensure that next time it works.
Sales are key to any business, but risk is equally important, so when you are busy bringing in the sales, risk is an important item on any board agenda. Understanding the key risks of your business is essential but it is important that all employees understand that risk too, and how they can minimise potential pitfalls in the way they do their jobs. The board is there to challenge and ask about the key risks. Have they changed? Are there new risks to identify? Is there a plan if one or more become real? I wonder how many boards were asking to see a plan for both Remain and Brexit, I think we know the answer to that, which is why keeping a risk register as a living document is a good idea.
The board should ask challenging questions to make sure the business doesn’t take a reckless path and needlessly fail, which is why effective governance of a business is so important. The right board members should keep a close watch on costs because too much spending can crash a business, whether large or small. The board is there to check on the resilience, profitability and quality of the business and how it treats its staff and customers.
At Mortgage Intelligence, we set up our board 20 years ago and have had regular meetings ever since, which has truly served us well as a business.