Navigating Corporate Bankruptcy on a Board of Directors

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Because board members have a financial duty to their shareholders, the time may come when an insolvent organization must consider the option of bankruptcy in order to protect those investors’ interests. In many states, creditors are also designated as stakeholders and must be considered, too. Depending on the type of bankruptcy that is filed, board members may continue to operate in their directorial positions.

As an organization approaches the position of insolvency, board members must consider the options in front of them. According to the Houston Chronicle, “Conducting a thorough financial review and seeking professional help are now the primary concerns. Directors should avoid resigning because those who quit rather than engage themselves in the bankruptcy proceedings are generally viewed as being in derogation of duty.” In other words, board members shouldn’t jump ship during the company’s moment of greatest need.
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Where Do Boards Go for Training?

board member training

Serving on a board of directors means a lot of learning on the go, but that doesn’t mean there aren’t resources for boards that want to improve. Whether they’re sought out individually or as a team, board member training options can provide directors with even more specialization and confidence in their leadership abilities.

  1. If you’re a first time board member, look for guidance.

Being a first time board member can be an intimidating experience. You’re learning the ins and outs of corporate governance as well as the basics of parliamentary procedure all while guiding an organization. Walking into a director’s role without any formal training isn’t impossible, but it’s not an easy task either. Whether you’re joining a local nonprofit board or the board for a large corporation, there are tools that can help you become better prepared. For nonprofit members, you can easily find free online training courses like the ones at For-profit board members can attend in-person training events with outstanding organizations like the National Association for Corporate Directors, which offers a 3-day course specifically for new directors.
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Directorpoint Gets a New Look!

screen-shot-2017-06-06-at-3-38-02-pmAt Directorpoint, we’re dedicated to providing boards with a software product that will change the way they make decisions for the better. Every day, our hardworking staff strives to give our clients the best experience possible—whether it’s using our intuitive software or receiving support from our outstanding customer service team. We believe part of that great experience also means interacting with an attractive and forward-thinking brand.

That’s why we’ve decided to freshen up the look of the Directorpoint identity!

Don’t worry, though. This doesn’t mean that your familiarity with Directorpoint’s product will change. We’re simply updating our logo and website to ensure that the look and feel of Directorpoint reflects our focus on the future. You’ll still be logging into a product that’s ease-of-use is unparalleled.

In the coming days, Directorpoint’s communications will look a bit different. We hope that you’ll enjoy the aesthetics of our little makeover. We’re really proud to bring you a better and brighter Directorpoint!

The Pros and Cons of Going Public

Going public IPO

If you’re a board member for a large or fast growing company, there may come a time when you and your colleagues will be asked to determine whether that company should “go public.” Investopedia explains, “Going public refers to a private company’s initial public offering (IPO), thus becoming a publicly traded and owned entity. Businesses usually go public to raise capital in hopes of expanding.” Companies that decide to go public are not only faced with enormous opportunities to grow their organization, they also have to deal with the downsides or challenges associated with the transition.

According to a survey by The Next Million, these are some of the major challenges of going public:
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What Is an External Auditor? (And When Do Boards Need One?)

Close-up Of Businessman Checking Invoice With Calculator At Desk

When it comes to reviewing a company’s financial status, every organization needs a good auditor. Auditors cull through in-depth accounting information in order to ensure that the reporting is a true representation of the company’s financial position. Auditors also assess things such as risk in order to help guide organizations to a healthier and more prosperous financial future.

Internal audits happen frequently within an organization. Companies utilize their own hired talent to review the work of others or the overall validity of the company’s financial reporting. As the Association of Certified Fraud Examiners explains it, “The internal audit function helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. The scope of internal auditing is broad and may involve the efficiency of operations, IT controls, the reliability of financial reporting, deterring and detecting fraud, and compliance with laws and regulations.”
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What Should You Do After Every Board Meeting?

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Your latest board meeting has just ended, but that doesn’t mean your responsibilities are over until the next gathering. In fact, there are several tactics that should be employed after every single meeting to ensure that your board is functioning as effectively as possible.

  1. Send a survey.

Send a brief survey after every single meeting. This 3-5 question survey should ask directors to rate their experience of the board meeting. Use this opportunity to determine whether board members feel that the agenda was adequately covered and if they have suggestions for future meetings. It’s important to send the survey shortly after the meeting while the details are still fresh on directors’ minds. (A yearly, more in-depth survey is also a boardroom must.)

  1. Distribute the minutes.

It’s important that board directors can quickly and easily review the meeting minutes for accuracy. Board software simplifies this process in a big way and encourages more involvement from directors. Create a clear process for editing the minutes, so board members can follow the time frame.
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Strategically Building Your Board

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Outstanding board members certainly don’t grow on trees. In fact, finding the right group of business leaders to impact your organization for the better is a true challenge. Not only must you consider individual fit and ability, but also how the group will work together. Here are some tips to help you tackle this undertaking in pursuit of exceptional corporate governance.

  1. Think strategically about the organization of your board.

Before you can expect directors to think strategically about your organization’s future, you need to think strategically about your board. First, take some time to consider what size board makes the most sense for your organization. Perhaps you’ve been operating with 7 members, but changing to 9 members makes sense for tactical reasons. Don’t choose a number at random; be sure you can back up the decision with consideration and research. Next, update your board member job descriptions. Make sure that the expectations for directors are clear. You can’t anticipate success from anyone unless you’ve provided them with an outlook for their role.
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Why Boardrooms Need Marketing/Communications Leaders

commphotoHistorically speaking, boardrooms have favored business leaders with backgrounds in business strategy and finance. As the technological landscape has progressed, though, they’ve also been eager to embrace individuals with vast experience in cyber risk. Marketing and communications professionals, however, have remained on the perimeter of boardroom involvement. But as news and PR cycles continue to grow more powerful, invasive, and easily accessible online, it’s high time for boardrooms to embrace their media-savvy peers as vital corporate leaders.

Just ask United Airlines. In the wake of their current PR nightmare (which involved dragging a man off one of their flights), their CEO released a statement that came across as tone deaf to many readers. Not to mention, United Airlines stock has dropped $1.4 billion in the wake of this crisis. Combine this event with the recent confusion over two teens who weren’t allowed to fly wearing leggings, and you can bet that the United Airlines’ board isn’t having a very good couple of weeks.
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Reviving a Disengaged Board

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Although boardrooms are filled with successful business leaders, they’re still comprised of human beings who will occasionally falter. General disengagement is one of the most common struggles that boards—particularly nonprofit boards—will face. It’s not a death sentence, though; a disengaged board is not beyond repair! In fact, here are some tips for reviving your boardroom and getting on the path towards a high-functioning and involved leadership team.

  1. Set clear goals.

Many leaders are deadline-oriented and need extremely clear objectives in order to know how much effort they need to exert to meet or surpass expectations. Don’t be afraid to set high goals, so your board members feel the push to excel.
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Better Board Agendas

Better Board AgendasThe agenda and the board book have been the centerpieces of board meetings for decades. While the board book provides important information and reporting, the agenda acts as the guide for the course of the board meeting. It may seem like nothing more than a simple list, but the agenda wields serious influence over a board meeting’s progression.

You’re probably thinking, how can a basic list be improved? But we’re here to say that it can be done!

  1. Ask: Does this agenda item involve everyone?

This may seem like a no-brainer, but you’d be surprised how often boards include agenda items that should actually be discussed in smaller committees or one-on-one outside of the board meeting. Boardroom time should be focused on group-oriented tasks and decision-making in order to get the most collaborative value out of your gathering.

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