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Archive for category: Corporate Governance

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High Growth Firms, Board Governance and Leadership Succession

Board governance is one of the most important elements in high-growth firms. We often get a wide range of questions on managing risks in high-growth organizations. Adopting risk management best practices early in the development of an organization can put your firm on the path to accelerated growth. If done correctly, high-growth firms have the ability to continue along their successful growth path.

The issue of board governance often comes up as high-growth firms establish their risk management program. Board governance is what really keeps your business moving and growing. Therefore, you must give leadership succession a very high priority. These leaders will move your company forward or backward, depending on their skills and understanding of how your firm operates.

The best way to prepare for succession is for the board to hold several discussions every year about who the best choices for new leaders are. They need to make an effort to get to know these candidates personally and observe how they react in crisis situations. They should also create assignments that will prepare candidates for possible future roles.

Without preparation for leadership succession, board members and investors may find they lack confidence in their inside choices. In such cases, many companies will tend to fall back on outside hires. This isn’t always a good approach, because while the new hires may look good on paper, they often lack the inside knowledge of your company that is necessary for making a smooth and long-term transition. Boards should instead hold leadership succession planning meetings to keep track of candidates and their progress in gaining the needed experiences that will prepare them for their new positions.

High-growth firms should include board governance and leadership succession in their risk management planning. These long-term goals can help prevent potential serious losses resulting from a disruptive transition in leadership. For more tips and strategies on risk management planning for high growth firms, please contact one of our TechAssure Association members today.

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Pointers for Technology Firms that are Establishing a Board of Directors

As your company grows, the time may come when you are in need of guidance and direction from a team of experts. Consider the areas of your business where you lack expertise and need some direction or input to continue your company’s growth. Establishing a board of directors may be the solution to maintaining growth and establishing sound direction.

The board of directors, serving as a company’s governing body, is responsible for the overall management of the business. They set policies, establish long-range goals and approve operating budgets, as well as evaluate and hire key managerial staff. Though they are not required to know everything about your specific business, they are required to act responsibly as they carry out their duties.

Establishing a board of directors for a technology firm can be difficult. At times, a less mature technology firm could take many different directions. However, there are some important points to consider when putting together a board.

• Provide a job description for each potential member of the board. It is vital that prospective board members have a clear understanding of what is expected of them and what their responsibilities will be. Without a job description clearly laying out was is expected, the board is sure to be unproductive.

• Be patient when establishing a board of directors. Proceeding carefully gives you the opportunity to learn more about the individuals you are considering, and decide if their motivation to join the board is compatible with your company’s agenda.

• Look beyond your inner circle. It is crucial to recruit the best talent available when creating a board. While you may know people with the skills you require, they may not have the right expertise or experience.

Establishing a board of directors can be beneficial to your technology firm in many ways. Besides bringing expertise and know-how, a board of directors can provide instant credibility to an organization. Having an independent body overseeing auditing procedures and eliminating potential management abuse and fraud can be very attractive to potential investors.

Once your board is in place, your company is properly positioned to go to the next level. However, it’s important to recognize that with a new business structure comes new risks. The members of TechAssure Association can help you manage your management liability exposures. They have the knowledge, tools and expertise to help you respond to a wide range of risks that face your board members. Please give us a call for more information.

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CFO’s in the Technology Industry Play a Key Role in Risk Management

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At a time of global change and uncertainty, the CFO position can play a dynamic role in risk management for a technology firm. In 2013, there are new and varied risk trends that a CFO needs to keep in mind when building strategies for company growth and survival. The members of TechAssure Association serve more than 5,000 industry clients and we are witnessing a few trends in risk management that are worthy of discussion.

Risky Tech Trends

A growing dependency on a tech-driven decisions and presence becomes a worrisome factor when assessing your organizational risks. “Big Data” has helped companies expand at a vigorous rate, yet it exposes companies to a wide range of cyberliability risks. This trend can’t be ignored. Cyber exposures exist in most companies.

Linking the Points Between CFO, CIO and CRO

The best risk management programs in a technology firm are the ones where the CFO, CRO and CIO are linked. If your organization doesn’t have lateral communication between these roles, you may not be experiencing the benefits of a strong cohesive risk management strategy and program.

Courting of Company Culture

When you develop your company guidelines and procedures, remember the importance of including risk management points and balancing the overall culture of the business. Calculated risk is an important part of company growth. You need to implement guidelines and build in expectations for risk, carefully managing and mitigating this by management throughout your organization. Communication should be open and interactive from top-level officers on down, allowing for the entire company to learn how to “grow smart.”

Versatility in a Changing Market

Successful risk management relies on a company’s versatility in a constantly changing market. The ability to change the marketability of a product based on trends and global need is an important part of risk strategy and scenario planning. Ideas of the board, CFO, CIO and CRO need to be in developed in conjunction with changing market trends. Analyzing the market trends and building a risk management strategy to support your objectives is key.

CFOs in the technology industry play a key role in risk management. When forming a strategy on risk management, consider speaking to a member of Tech Assure Association. Our worldwide network of brokers can build a program around your company’s unique requirements. Please contact us to learn more.

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Ten Tips for Establishing a Board of Directors that Will Ensure Your Company’s Growth

Establishing a board of directors helps take your business to the next level. As a company grows, one may find it needs a board to keep the company running smoothly and efficiently. Being an entrepreneur, it is satisfying watching your company succeed, here are some tips to help you decide how to form the board of directors perfect for your firm.

  • Always plan for the long term. Recruit directors you feel will make it a priority to further company growth.
  • Root out the potential leader. During the establishment of your board, there will be an individual who stands out from the rest as your right hand man or woman. This individual should be a natural leader with exceptional governance skills. If possible this individual should be trained or chartered by the National Association of Corporate Directors
  • Create clear and concise job descriptions for each member. Executive and non-executive directors should have a clear idea of their responsibilities. These job descriptions should help the board tackle issues directly and strategically.
  • Each member should be and integral part of the team. Each should be diverse and well versed in their field of governance, but also be able to work well in a team environment.
  • Pick those who are not afraid to disagree with you on certain issues. Each individual should not be afraid of conflict and should be able to challenge certain decisions they feel will be damaging to the company. The board is not there to agree with you %100 of the time, they are their to help the company exceed expectation.
  • Seek consensus on all issues presented to the board. After discussion, presentation, and analysis, the board should be able to come to important decisions in matters of importance. Majority rules.
  • Be clear about each individual’s specific role on the board and allow each to stick to his or her position. For example do not combine or confuse CEO and the chairman as one in the same; delegate accordingly.
  • Respect the Hierarchy established on your board. It is the board’s collective wisdom and enhanced discipline that will get the job done and your company growing.
  • Always seek expert advice. If you need help deciding on how your board should be set up, don’t be apprehensive about asking for help.

In this tough economy, it is the professionals at TechAssure that understand that it is the entrepreneur who will keep America’s economy on track. Contact a TechAssure member to learn more about the insurance products and services we provide in management liability. Let us help you keep your business growing.