If your business is growing, an advisory board can help you step back and make better decisions. It doesn't need to be formal, and you don't need paid non executive directors. For an owner-managed business, an advisory board can simply mean a dedicated meeting every month with your figures, and someone from outside the business who asks good questions.
I'm a member of Entrepreneurial Scotland. At one of our members' days, I sat in on a session led by a professional non executive director. She started by asking everyone in the room to stand up, then sit down if their business didn't hold board meetings. About half the room sat down, which surprised me. Entrepreneurial Scotland members run growing businesses, and many are bigger than ours. Even so, half of them weren't holding board meetings.
It got me thinking about how many owners see a board as something for large companies, with formal minutes and a room full of people in suits. At Benson Wood, we hold our own board meeting every month, and it's far less formal than people expect.
Does an owner-managed business need a board of directors?
Every limited company in the UK needs at least one director. So if you run a company, you already have a board of sorts. In an owner-managed business, that board might just be you, or you and a business partner.
A small private company has no general legal requirement to hold regular board meetings. The day-to-day takes over, and bigger decisions get pushed back until they become urgent.
A board meeting gives you a fixed point in the diary to deal with those decisions properly. We describe it as getting off the dance floor and up onto the balcony. When you're in the middle of the business all week, working with clients and supporting the team, it's hard to see the full picture. Stepping up onto the balcony once a month or once a quarter gives you the chance to see how everything fits together.
How do you run a board meeting in an owner-managed business?
It can be much simpler than people imagine. Start by putting a regular date in the diary and sticking to it. In professional services firms, such as law firms, architecture practices and surveying firms, client work tends to come before everything else, so protecting that time is often the hardest part.
Before our meeting at Benson Wood, we issue a board report. It contains the financials plus short reports on marketing, business development, operations and people. We read through it beforehand, then agree on the three main areas that we need to talk about.
A board meeting doesn't have to be a fuddy duddy affair. The point is to give yourself dedicated time to look at what's happening in the business and focus on the decisions that need your attention.
Having someone from outside the business in the room can help too. Our meetings are facilitated by an external business mentor, which gives us another perspective on the decisions we're making.
Afterwards, keep a note of who was there, what you decided, and anything agreed before the next meeting. If it's a meeting of your directors, the law requires you to keep minutes for at least ten years, so make sure that note is kept as part of your company records.
What are the benefits of an advisory board for a growing business?
You can hold a board meeting on your own, and that's better than not holding one at all. The difference comes when someone from outside the business sits in.
When you've built a business, you're close to every decision. You know the history behind why things are done a certain way, and that can make it hard to see what needs to change. Someone from outside has no attachment to any of it. They'll ask questions your team might not feel able to ask. They'll also challenge assumptions you didn't realise you were making.
Board adviser or non executive director: what's the difference?
A non executive director is formally appointed to your board. They're registered as a director at Companies House and take on the same legal duties as any other director. That suits some businesses, particularly those with outside investors. However, it can be expensive, and it brings a level of formality many owner-managed businesses don't need.
A board adviser sits in on your board meetings and gives their view without being appointed as a director. You make the decisions, and they help you think them through. For many owner-managed businesses, that can be a simpler place to start.
If you do want someone appointed formally, that's a different conversation, and one to take legal advice on.
Could business owners sit on each other's boards?
Yes. If two owners agreed to advise each other, they could bring in an outside view without each paying for a non executive director. It would also give each business someone with a different slant on things. An owner from another sector will look at your figures and plans with fresh eyes. They’ll also understand what running a business is like, because they’re dealing with the same challenges themselves.
I already sit on an Exchange board through Entrepreneurial Scotland. It's a group of business leaders who meet every two months to help each other. After the members' day, I suggested some of us could go a step further and sit on each other's boards as advisers. For that kind of arrangement to work, it helps if the two owners know each other well and have similar values. There also needs to be a commitment on both sides to developing the relationship over time.
Should a board adviser sign a confidentiality agreement?
Anyone sitting on your board will see your figures and hear about your plans. Both sides should sign a confidentiality agreement before the first meeting.
How long should a board adviser arrangement last?
I'd approach it as a longer term relationship. Someone coming into your business needs time to understand how it operates, what you're trying to achieve and the challenges you're facing.
The more familiar they become with the business, the better placed they'll be to challenge your thinking and help you make decisions.
I'd still review the arrangement regularly to make sure it's working for both sides, but the real benefit comes from having somebody who gets to know your business over time.
How often should a growing business hold board meetings?
We hold ours every month, and that's what we recommend to clients. Some businesses prefer to meet every second month or once a quarter.
The right frequency depends on how quickly things are moving in your business. Whatever you choose, stick to it. A board meeting that keeps getting cancelled won't do its job.
How can your accountant support your board meetings?
Your accountant already knows your figures, which puts them in a good position to help.
For our Grow With Confidence clients, we facilitate the board meetings. Your Growth Report becomes a full board pack. Alongside the financial and performance figures, it includes a team report, a marketing and business development update, an operations overview and a risk register. We go through it with you and help you decide which areas need attention first.
There's a regular check-in between board meetings too, so anything urgent can be picked up quickly.
If your business doesn’t hold board meetings, talk to our team. We can go through what a board meeting could look like for your business, and whether having us alongside you would help.
Frequently asked questions about board meetings for growing businesses
Does a growing business need to hold board meetings?
There's no general legal requirement for a private company to hold regular board meetings, though your company's articles set out how directors make decisions. Growing businesses still benefit from them. A regular board meeting gives you protected time to go through your figures and make decisions before they become urgent. If you hold a formal directors' meeting, keep a record of what was discussed and decided.
What's the difference between an advisory board and a board of directors?
A board of directors is made up of people formally appointed as company directors, with legal duties and a record at Companies House. An advisory board, or a single board adviser, offers views and challenge without being appointed. The owners still make the decisions. For owner-managed businesses, an adviser is often a simpler and cheaper starting point.
What should be on a board meeting agenda for a professional services firm?
Start with your financial figures, then short updates on the main areas of the business, such as marketing, business development, operations and people. From there, agree on the handful of issues that need discussion that month. Circulating a board report beforehand means everyone arrives prepared and the meeting stays focused.
Can my accountant act as a board adviser?
Yes. Your accountant already understands your figures, so they can prepare the board report and help you interpret it. At Benson Wood, we facilitate board meetings for our Grow With Confidence clients. We turn their Growth Report into a board pack and check in regularly between meetings.
