Significance and Functions of Board of Directors

According to a research study conducted by PwC, “Ninety-one percent of directors find new members through director recommendations, suggesting a preference for referrals by someone they know and trust. However, 67% use search firms.”

The constitution of company is never complete without a Board of Directors. At the start, it can be a single person – the lone founder – who represents the board. But it cannot go on like this for long as you will not be able to avail the benefits that are associated with having a board.

A board of directors plays an indispensable role in constitution and governance of most enterprises. The board is responsible for the firm's financial decisions and ensures smooth running for different legal procedures. The board has the authority to select, compensate and replace key executives, when necessary.

The major functions of boards members include:

·         Analyzing and facilitating corporate strategy and major plans of action

·         Reviewing and guiding annual budgets, business plans and  risk policy

·         Setting performance objectives & ensuring their execution

·         Monitoring corporate performance

·         Overseeing major capital expenditures, divestitures and acquisitions

A nominating entity – usually the founder – first nominates the members for the Board of Directors. The nominated members are then elected by shareholders through voting. It is important to select experienced and responsible board members who can contribute efficiently in the growth of the company.

If you are looking for some effective guidance on selecting the right set of board members, you can seek some useful advice from CEO peer groups. The stalwarts and industry leaders from non-competitive organizations meet at a CEO conference and share their experiences and knowledge with a candid, honest, no-holds-barred approach.

CEO groups act as a great platform for aspiring entrepreneurs to seek help and counseling to build a successful business entity.

In this blog I have discussed the importance and functions of a Board of Members. In my next blog I will suggest some tips that you should consider while nominating directors for your enterprise. Watch this space!

Pick the Right Cherry When it Comes to PR Agency

It is in continuation of my previous blog “Picking the Perfect PR Agency”.  Here are some more tips to be considered while asking for the services of a creative agency. 

Request a proposal

You can ask the different advertising agencies for a proposal, action or PR plan, for your project. It can give you an idea about the strength and reach of the agency. You can demand credentials such as sample press releases and case studies to have a feel of the style of writing and promotional strategies.

 Team Strength

It is very essential to access the expertise and strength of a complete PR and creative team, which will be showcasing and promoting your products to the potential customers. In a team, usually senior consultants are responsible for doing pitches and presentations. These are the mid level managers who take care of your account. So make sure, you have a seamless communication with the professionals involved in your project.

 Bang for the Buck

As an entrepreneur, you should know exactly what benefits or returns you should be anticipating in lieu of the money you are pumping into an ad campaign or marketing project. Be very sure of your budget before hiring a branding agency. It may happen that your PR consulting company charges some unnecessary fees while handling your branding exercise.

The PR agency, apart from narrating your story to the press, also designs, writes, and positions your brand image to woo your target audience. It is also responsible for handling crises and building your reputation. Keep a track on the events during the course of your marketing and brand building campaign and make sure it is worth your every penny spent.

CEO Peer Groups

Experience is the greatest learning.

Benefit from the experiences of industry leaders at a corporate executive coaching and get some smart guidance on how to pick the perfect PR agency out of the scores of PR companies around. AT a CEO peer group or CEO club, you can also come to know the contacts of some good advertising agencies that have proved their worth in projects they have handled.

Picking the Perfect PR Agency

A Public Relations (PR) agency acts as an efficient medium to reach mass audiences and expand the reach of your products and services.

The process of managing communications is as significant as communications themselves, which makes the role of PR agencies vital. Be it be your own PR staff or an outside agency, they have an inevitable influence on your organization's reputation, growth, corporate identity, branding and overall success. 

With so many reputed PR companies around, choosing one that suits both your brand and budget is like finding a needle in a haystack. 

The following tips can help:

Research

Make sure you have done your homework before zeroing on a final branding agency. Do a thorough market research about all reputed advertising agencies and choose the one that meets your needs.

Experience & Skills

Be very particular about the experience and the projects handled by the PR Company!

How much value did the PR agency added to its previous projects? What are is the level of expertise and skills of the agency? How well do they meet deadlines and handle pressure?

These are questions you should have answers for when you consider hiring a PR agency for your projects.   

Reputation

The market reputation of a PR company speaks volumes about its credibility and efficiency. Consider the “word of mouth” for the company. If people say good things about the agency, there must be something good in it.

Social media

Enquire about the channels that the PR Company has the access to for promoting your company or the brand. Go through the agency’s website and blog posts to ensure if they are present at social media channels such as Facebook and Twitter. Being the talk of the town and presence in headlines, always work when it comes to promotion.

Seek assistance at CEO Conference

A leadership conference is a useful forum where you can get some tips for choosing the right communications and PR agency for you.

 A management conference or CEO peer group combines the experiences of stalwarts from non-competitive organization under one roof allowing you to get insights into the basics of product marketing. 

Take the opinion of CEO peers and share your ideas in your CEO peer group to get practical advice on the best PR strategies you can employ.

We will be discussing some more points in our next blog. Watch this space!

Basic Elements of a Joint Venture

In our last blog, we talked about the preparatory steps needed to enter into a joint venture. In this blog we will be discussing the basic elements of a Joint Venture, which one should be aware of while binding into a contractual agreement.

The Ways You Can Enter Into A Joint Venture

A joint venture can be structured in four major ways – when a foreign investor buys an interest in a local company; when a local firm acquires an interest in foreign firm; when both local and foreign companies forms a joint enterprise; and together with public capital and/or bank debt.  

Choosing Right Partner Is Very Important

The success of a joint venture depends on both the partners, which makes it important to choose your partner carefully. For this, you need to do a screening of all the prospective partners. Make sure you have checked the credentials of your partner before signing the agreement. The marketing and distribution network, R&D, technical knowhow, infrastructure and reach of the company should also be considered before signing the joint venture agreement.

Maintain Contractual Integrity 

Every joint venture partner has a fiduciary responsibility – a duty to act for someone else's benefit while subordinating one's personal interests to those of the other person – and has the duty to act in Good Faith in matters that concern the common interest or the enterprise.

A joint venture can terminate at a time specified in the contract – upon the accomplishment of its purpose, upon the death of an active member, or if a court decides that serious disagreements between the members make its continuation impractical (Source: TheFreeDictionary).

All the participating parties in a joint venture share some mutual responsibilities and goals, and have a set of certain rights and duties. The parties have a mutual right to share the profits and control the enterprise, and a duty to share in any losses incurred. In order to avoid any trouble in later stages, the parties should be aware of all the terms, conditions, and clauses of the agreement. 

The Right Guidance

Every initiative requires effective guidance from the expert and experienced. CEO coaching provides you the requisite guidance and knowledge you need to have before entering into a joint venture. There are a number of reputed CEO Associations that holds expertise in providing CEO training. You should consider joining a CEO club to understand more about a joint venture.

Tips for the CEO to Resolve Conflicts in a Team

“Knowledge of other people's beliefs and ways of thinking must be used to build bridges, not to create conflicts.”

—    Kjell Magne Bondevik

Conflicts are always the uninvited guests in a workplace. Their existence is inevitable in an atmosphere where a number of people with different backgrounds, interests, preferences, aspirations, and likes, work for a common goal.

Though it is difficult to avoid conflicts, the ability to recognize a conflict in the initial stage marks the true character of a great leader. Since conflicts are malignant in nature, it is very important for the management to quickly identify the root cause of conflict and find an effective resolution to it.

Here are some tips to resolve conflicts:

Prevention is the Cure

You should be alert enough to identify the conflict at a very early stage. Normally, conflicts at a workplace arise due to some misunderstandings between coworkers or real biases of the seniors. Therefore, treating all employees equally and implementing a fully transparent appraisal system can prevent several conflicts.

  

A Well-Defined Job Distribution

Jealousy is one of the main reasons of conflicts. A leader should have a proper job distribution system in place. The system should be unbiased, scientific and transparent that takes into account the abilities, skill set attitude, performance graph, productivity level and discipline of the employee.

Do Not Play a Favorite’s Game

A leader should always exhibit an unbiased approach towards his all employees.

You should avoid favoring a particular employee while handling a conflict. Begin the conversation by highlighting the positive points and let them discuss each other’s qualities. 

Most of the conflicts develop as a result of some misunderstanding. Let your employees state their issues in front of each other and try to come on to a solution acceptable to both sides.

Promote a Friendly Work Atmosphere  

Share a friendly relationship with your team members. Be approachable so that they do not hesitate to discuss their problems with you. Organize monthly meetings and encourage your subordinates to speak their heart out.

You should also call your juniors for one-to-one sessions where they can share their professional as well as personal problems.    

Create a Learning Opportunity Out of Conflict Situations

Smart leaders can find their ways beyond the dead ends.

Dealing with a disagreement underlines an inherent potential for personality development. While you resolve a conflict, present it as a case study for rest of your team members. You should try and find effective ways to prevent same instances in the future.        

Organize Group Outings and Adventure Sports

Participating in group activities builds team spirit and transforms enemies into partners. 

Most of the conflicts get resolved automatically when two parties work united to achieve a common goal. Sports have proved their effectiveness in resolving conflicts to a great deal. 

Seek Expert Guidance at CEO Peer Groups 

     

If you are looking for expert guidance, join a nearby CEO Club. CEO Clubs play an instrumental role in helping CEOs understand their role better and facing challenges successfully. You can also ask your peers at your CEO conference to suggest you ways to culminate conflicts within your organization.