Directors’ Role in a Small/Medium Business – Part Two
Board of Directors with Mentor
Some Board of Directors find it beneficial to appoint a mentor to assist in corporate governance training for the directors. The mentor’s role is to advise the directors on corporate governance processes. The mentor is only present to give advice and should not participate in a decision made by the Board of Directors.
There are some government grant programs which may contribute to the cost of companies appointing a mentor.
Company acting as a Corporate Trustee
Many businesses operate through a Trust. It is good business sense to utilise a “Corporate Trustee” rather than individuals as Trustees of the Trust. The Minutes of a Board of Directors meeting acting as Trustee of a Trust should indicate that the Board is acting as Trustee of a Trust when a particular Board of Directors meeting is held.
Board of Directors – External Directors
Some companies are finding it beneficial to appoint one or more external directors to their Board of Directors. Some companies are also inviting one of the external persons to accept the role of “Chair” of the Board of Directors.
The benefit to companies from having external persons appointed to their Board of Directors normally relates to corporate governance matters and the smooth running of a Board of Directors meeting.
The external directors can also bring their knowledge and skills from exposure to other companies and businesses into deliberations at the Board of Directors meeting.
If a company resolves to appoint one or more persons as external directors it should not be viewed as a “lifetime appointment” because there can be some real benefits to the company in “refreshing” the membership of their Board of Directors every few years to get access to new ideas and different thinking on how to approach corporate problems.
If you would like to discuss with us any aspect of the composition of your Board of Directors, please do not hesitate to contact us.
An Important Message
While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.