Salon Today - February 2009 - (Page 25)

>BOARD MENTALITY EVEN SALONS THAT ARE CORPORATIONS, and therefore have legal obligations to establish a board of directors, tend to keep the boards informal and invite only owners to join. This was the case with Neill Corporation, until its current president, Edwin Neill III expanded and formalized the board of the multifaceted company, which includes an Aveda distributorship, Paris Parker Salons, Neill Quality College and SalonBiz and SpaBiz software. An attorney with an MBA degree, Neill invited three outsiders—the president of a Neill Corp. afﬁliate, the CEO from another industry’s distribution company and a professor from a nearby university—to complement his four-person management team as additional directors. At formal board of directors meetings, decisions are made through binding votes, and someone is in charge of taking minutes for the meeting. Prior to the meeting, each director receives a “board book” listing the agenda items and previewing the discussion points. Generally, Neill’s four- to six-hour meeting, conducted by the president, is comprised of: • THE PRESIDENT’S REPORT, detailing the ongoing operations of the business and making the board aware of any unusual developments, such as litigation and new business opportunities. • QUESTIONING, during which the outside directors have an opportunity to explore any gaps in logic or discrepancies with numbers. • NEW BUSINESS, which can range from exploring compensation plan options to asking for advice about negotiating a lease to selecting the site of the next salon location. • FUTURE OUTLOOK, a forecast of the coming months’ P&L (proﬁt and loss) picture. • EXECUTIVE SESSION, which, when necessary, allows the president to meet with just the outside directors for guidance concerning a personnel, sensitive or conﬁdential issue. Cost involves the time the inside team spends on preparing the reports as well as per-meeting compensation for the outside directors. However, Neill says it’s not necessary to meet more than twice a year or, at most, quarterly if there’s some fastchanging activity. “When you bring in $10 million a year, you act like other businesses that bring in that kind of ﬁgure,” Neill maintains. “And those companies rely on advice to analyze where their business is currently and how to grow and move forward. While a lot of what we do on the people side of our business departs from other industries, there’s nothing that would change the way our boards of directors work. Much like advisory board members, Neill’s directors are most helpful when they’re being tough. “Your outside directors may grill you on your numbers until they’re conﬁdent that what you’re saying makes sense,” says Neill. “That’s critical, and it’s why it’s important to include on the board not only the people whose paychecks you sign.” Minority shareholders are generally invited to the board meetings, although the typical salon operation has few if any minority shareholders, Neill sees that changing. “I know of a couple of salon groups now being run by the second generation,” Neill observes. “Those companies have multiple shareholders. The corporate life cycle of a salon used to coincide with the life cycle of the founder, but today the industry is evolving to include more multi-generational companies. Do we need to act like other industries now that we’ve grown up? Yes, and a board of directors is a big part of that.” listening skills and enhance their leadership potential. “I treat the groups as though they’re my boss,” says Zona. “It forces me to prepare and do presentations, which makes me a better decision-maker.” But it’s the inherent accountability that’s irreplaceable. “When we outline what we intend to accomplish for the coming quarter, at the following meeting the board will refer to those stated goals,” says Charles. “If we say we’ll do something, they’ll hold us to it.” Zona agrees. “Business owners tend to ask pointed questions,” he says. “When you own a business, you don’t necessarily answer to anybody, and because of that we can trick ourselves. The other business owners call you on your own claims.” n www.salontoday.com February 2009 | 25 http://www.salontoday.com/touchsuite http://www.salontoday.com

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Salon Today - February 2009 Contents Editor's Note Reception Spa Menu Decor Inside Look Custom Color Board Games Where's My Exit? Products Owner to Owner

Salon Today - February 2009

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