Practical approach towards Board of Directors

1. February 2013 Slide 1© 1
February, 2014
Franky Van Damme
Managing Partner, PSX Advisors
franky.vandamme@psx-advisors.com
Board of Directors,
practical

2. February 2013 Slide 2©
Advisory Services
PSX focuses specifically on high-growth and mid-cap
European Technology and Applied Technology companies
BOARD
MEMBERSHIP
STRATEGIC
ADVISORY
FUNDING
MERGERS
&
ACQUISITIONS
SHAREHOLDERS
ALIGNMENT

3. February 2013 Slide 3©
Why do we need a Board
 Legal requirement
 To steer the Company
 To control the Entrepreneur
 Define the Strategy
 Monitor the Company
 Risk Assessment

4. February 2013 Slide 4©
Members of the Board
 Investor (1..x)
 The investor friends
 Domain experts
 Advisors
 Employees
 Entrepreneurs
 Management
 My friends
 Chairman
A well balanced composition of the Board and an
independent Chairman can make a huge difference

5. February 2013 Slide 5©
Who does what
 Board members “setting the goals”
 Executives “getting the job done”
Skill set
 Different (Technology – Operational
Financial – Business development)
 Local / International
 …

6. February 2013 Slide 6©
NThe next step
• Focus on the M&A - IPO process
• Monitoring the budget
E
Evolution
• Well balanced team
• Agenda management
• Strategy and direction setting
Investor
• We get formal meetings
• Getting to know the company
• Process in place
I
Trouble
• Lack of leadership by the chairmen
• Aggressive meetings
• ….
T
FFFounders & Friends
• Happy together
• Explain to each other ….
• Legally OK
The Evolution

7. February 2013 Slide 7©
The Meeting
Agenda
 Minutes
 Business Update
 Financial / Reporting
 Clients
 Market and Competition
 IP
 Risk Assessment
 Product Portfolio
 Strategy
 Human Resources
 AOB
Approach
 Present / explain
 Options and proposals
 Discussion
 Decision
Subject
 Indication of timing
 Type, for… (information / discussion / decision)
 At the end…check draft minutes

8. February 2013 Slide 8©
What works …
Monthly
 A Business Reporting pack (max 15 p. with max 3p. descriptive)
 A Financial Dashboard
Before the Board meeting
 Send out all relevant material (including the Financial and
Business info)
 Ask to get questions related to the Financial and Business info
beforehand
 Prepare the meeting with the chairman
The Meeting
 Start with a breakfast or sandwich lunch (late arrivals)
 The chairman has to lead the meeting
 Respect the timing
 Make use of a secretary for the minutes (crisp and clear)
 Frequency of 6 – 8 meetings
 With additional telephone conferences or specific meetings

9. February 2013 Slide 9©
Additional Committees
 When
 Investor on board
 Stage of the company
 Which
 Finance/Audit Committee  permanent
 Accounting policies
 Defining the financial/business reporting pack
 Authorization levels
 Screening the budget figures
 Internal control
 Preparation of the yearly financial figures
 Interface with the auditor
 …

10. February 2013 Slide 10©
Additional Committees (2)
 Human Resources/Remuneration Committee  permanent
 Defining the remuneration of the executive
and non-executive directors
 Overall compensation and benefits policy
 Stock option plan
 Hiring/firing process
 Personnel evolution process
 …
 Strategy Committee  temporary
 Define the strategic objective
 Analyse the Order Intake, Clients, Products,..
 Get info about the competition and the market
 Investigate different scenario’s
 Propose the way forward
 …
 …

11. February 2013 Slide 11©
Some Cases
Profit
Revenue
DeclineMaturityIntroduction Growth
Course of Time
Revenueor.Profit
Development
U
A
C
B S
B
B
T
D

12. February 2013 Slide 12©
The Boardroom atmosphere
Exit
EquityChange
Strategy
Problem
Start
Panic
 People’s behaviour might change in line with the stage of the
company
 Be aware that the Executives know the business  Board
members are learning the business (in most cases).
 Some board members might have no operational business
experience.
An Aligned and Effective Board
will add Value to the Company
 Not everybody has experiences
in different kind of companies.
 Some people could have
difficulties with their day to day
role and being a Board member.