Advisory Groups, Part 2: Know when you don't know
Glenn Rieder's board of advisors provide valuable insights.
By Jerry J. Schlitz, Senior Vice President, Commercial Banking
Business owners have many balls to juggle. They not only need to keep their company moving forward, but also to deal with legal, financial and human resources matters. That's where having a trusted group of professionals to turn to can benefit business owners and help ensure the company is on the right track.
While some companies opt to have a board of directors, a legal entity with well-defined roles and responsibilities, others prefer a board of advisors, a collection of professionals who bring a diversity of opinions to the table but have no legally defined role. When Michael Floyd, CEO of Glenn Rieder Inc., was looking for a sounding board for himself and co-owner James Caragher, he decided to form an advisory board for the Milwaukee-based custom architectural millwork manufacturer and commercial interior contractor. The partners had purchased the company from the founder's son in 2000.
"Our business was growing and we were smart enough to know that we couldn't build a great business alone, so we decided to put together an advisory board" said Floyd. "It would be a group of people with diverse professional experience, and we would seek their counsel on the major issues confronting our business. We wanted them to ask us tough questions and hold us accountable."
The board serves in an advisory capacity and their efforts and opinions are non-binding. The initial board was comprised of five members – Floyd and Caragher – who also serves as the company's chief operating officer and general counsel – plus three outsiders. A fourth outside member was added about three years ago.
"We are lucky to have a strong board providing us with informal guidance."
Michael Floyd, CEO of Glenn Rieder Inc.
The group meets quarterly in person, but Floyd and Caragher may tap into them more frequently for special projects, such as a strategic initiative or acquisition.
If you're a business owner looking to put your own advisory board together, Floyd offers these tips.
Variety is key: When putting Glenn Rieder's board together, Floyd brought in professionals from different sectors, including a retired tax partner at an accounting firm, a business attorney who specializes in mergers and acquisitions, the retired CFO of a large, privately held manufacturer and a seasoned executive from a construction company.
"They bring their individual perspectives from these different areas," he said. "Diversity is definitely key. Look for people you respect and who have more experience than you in their specializations."
Be open-minded: "If you're not prepared to listen to what your advisors have to say, then maybe it's not for you," Floyd said. He adds, "It is vital to be open to what different members suggest or any criticism they may offer about a plan or issue. Successful business owners must realize that they don't have all the answers. They need help and guidance from the outside. A board of advisors can be this critical resource. These professionals can help your company through its challenges."
Be respectful: A board of advisors is a great resource, but always be respectful of their time and don't throw too many projects, questions or ideas at them at once. "Set up a regular meeting schedule and stick to it," Floyd said. When putting the group together, ask your potential advisors how much face time they feel can commit and whether they are interested in and able to respond to questions in between regular meetings.
Most business professionals are busy – even after retirement – so don't make assumptions about how much time they are willing to commit.
Floyd and Caragher appreciate Glenn Rieder's advisory board members and the role they've played in the company's success. "The benefits to having an advisory board are tremendous" said Floyd. "These are skilled business people who challenge our decisions and ideas objectively."
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Founded in 1946, Glenn Rieder is a custom architectural millwork manufacturer and commercial interior contractor serving all major markets across the United States. Headquartered in Milwaukee, the company also has offices in suburban Chicago, Fort Lauderdale, Fla., San Diego and Las Vegas. Learn more at www.glennrieder.com.
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