Building Industry Magazine - May 2011 - (Page 40)

BestPractices Board of Directors: Friend or Foe? BY GARRETT SULLIVAN Although all Hawaii corporations are required to have a board of directors, not all Hawaii corporations view their boards as assets. Boards can be comprised of a number of people, but the law only requires one member be named. As a result, most contractors list themselves as the chairman and simply name a senior employee or family member as the other member. Under this scenario, the only real interaction tends to occur at the required annual meeting, and most issues on the agenda are approved without any meaningful discussion. In my view, the contractor’s board of directors is the corporation’s most often unrecognized, underappreciated asset. Why not expand your corporation’s horizons by inviting new board members who will stretch your organization? Instead of serving as a rubber stamp to your actions — or worse yet, doing nothing at all — the right board members can help grow your company exponentially. The argument against having outside directors (i.e., non-employees or non-relatives) is the flawed perception that you, as the owner, lose some measure of control. Many leaders resist the idea of answering to a higher level of authority or having to explain his or her actions. At first blush, the thought of accounting for the company’s performance may seem like a chore, but if you think back to some of your company’s biggest successes, you will most likely acknowledge that they were somehow influenced by outsiders. To mitigate concerns about authority, an alternative is to create a board of advisors committee which performs the same functions as a traditional board without the legal authority to vote on company matters or replace officers. Regardless of the structure you select — board of directors or advisory committee — you’ll improve your company with the guidance of qualified, committed, and trusted advisors who neither work for you nor are related to you. An independent board or advisory committee is one of the secret weapons that propels average contractors into “Best in Class,” which comprise the top 15 percent of companies. I also recommend quarterly meetings. This will feel like a major undertaking at first, but you will quickly discover that this effort pays real dividends. If you schedule your meetings properly, you’ll get the very most out of your advisors without impacting too much of anyone’s time. In exchange for their expertise, a typical fee of $500 - $1,000 is paid at the time of the meeting. The results more than pay for themselves. The agenda should include major impact items for the company such as the previous quarter’s financial results, a budget review, overall operations, and a project review with emphasis on any problem jobs. Any major purchases that are being considered for the coming months should also be on the table. The meeting should close out with a mega-type issue such as succession planning, emergency completion plans, and capital and cash retention discussion. For best results, your meetings should be facilitated by someone who has the ability to keep the meeting on track. BI (Is it time for you to broaden your horizons? To download the full, unedited version of this article as well as a free Quarterly Meeting Agenda Template, go to www. SullivanHi.com. Garrett Sullivan is president of Sullivan & Associates, Inc. He is also a past president of the General Contractors Association of Hawaii and was the 2010 SBA Small Business Person of the Year for Oahu. Reach him at www.SullivanHi.com or 478-2564.) 40 | BUILDING INDUSTRY | MAY 2011 http://www.SullivanHi.com http://www.SullivanHi.com

Table of Contents for the Digital Edition of Building Industry Magazine - May 2011

Building Industry Magazine - May 2011
Contents
Datebook
March in the BIA Parade
First Wind Turns on Kahuku Wind Farm
Two New Rail Contracts
U.S. Transportation Head Visits Hawaii
Kalakaua Sidewalk Improvements Begin
New Turf for Aloha Stadium
Contracts Awarded
Hawthorne Hauls Blocks for Mission House
RENOVATION & REMODELING
MILITARY TRIBUTE
Low Bids
ENVIRONMENT & THE LAW
Spotlight on Success: West Hawaii Civic Center
Best Practices
WINDOWS, SKYLIGHTS & DOORS
Concept to Completion: Heleloa Neighborhood
New Products

Building Industry Magazine - May 2011