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Page 8 of 13 Building Your Corporate Staff
When you run a business you are often very careful about who to hire as employees. Planning your corporate staff is equally as important. These are the people that will be looked at when it is time to receive any kind of investment or loan and you need to have them in place to make sure that they are competent and professionals in their field.
Especially important is your board of directors. These are the people that are going to help you establish your leadership and the direction in which the company is going to take. They can essentially make or break a company. They might not be part of the day to day operations but they will be there to guide the overall direction of the corporation in general. A board of directors also works in protecting the management of the company. A competent board of directors can help with problems that are arising in the daily operations and can help to work towards a solution that the management might not be able to reach. Because the board of directors works like a democracy, voting on issues becomes commonplace and generally decreases any outstanding problems within your corporation.
When you decide to embark on incorporating your business you do lose some control over your business, but by having a great corporate staff you tend to see new ideas that can actually benefit your company more then if you were just in business for yourself. Also, you do have more corporate responsibilities that can be handled more efficiently with a board of directors. In most states your board size will vary, but generally the number of directors can not be larger than the number of corporate shareholders. Also, typically it can not be made up of less than three people. Even if your corporation is made up of yourself, you still need to have a secretary and a President.
The officers in your corporate staff can be removed and appointed at any time by the Directors, and a minimum of one person must serve as Director at all times. One person can hold more than one corporate office position and at the same time may also be a shareholder and can even serve as director themselves. Many smaller businesses operate with friends and people they trust as a board of directors. It works well if you do not have many shareholders, or operate the business solely on your own.
The actual cost of the board of directors will depend primarily on what you want to pay them. If you can’t afford to pay them then you need to tell them before asking them to serve on the board. For some, they consider being part of a board as an honor and do not have any issue doing it pro bono. As long as you provide a specific title and possibly a lunch every now and again, they are happy to hold the title that they can later use on their own resume. If you can afford to pay your board of directors you might be able to base your board more on skills and professional standing. Your corporation will benefit from having the talent that usually comes from more experienced board members.
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