Today’s post is by Randy Russon, founder of TOPCFOS
Welcome to our Blog today! TOP CFOS offers the finest CFO professional services to companies anywhere in the world who want to take their organization to the top. We absolutely love being a part of your success. We also love to be the catalyst behind your firm’s soaring profits! And, for your convenience, we provide an RSS feed down at the bottom of our website so you can subscribe to our blog. Today’s post comes from the Boards category on our website and is entitled Board of Directors.
Today’s post is aimed at smaller corporations who may or may not have a board of directors. So, the question is when should you form a board of directors? You should follow what your bylaws outline here. The sooner you are able to form your board of directors the better. A board of directors is there to help you run your corporation better. As you know, there are so many decisions that have to be made in a company and having qualified individuals on your board will help you to make better smarter decisions. Another factor to consider comes from a legal standpoint called piercing the corporate veil.
From Wikipedia we learn, “Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. Usually a corporation is treated as a separate legal person, which is solely responsible for the debts it incurs and the sole beneficiary of the credit it is owed. Common law countries usually uphold this principle of separate personhood, but in exceptional situations may “pierce” or “lift” the corporate veil.” Piercing the corporate veil happens when a plaintiff can prove that a corporation is really not being run like a corporation. So, this fact of having a board of directors along with holding scheduled monthly meetings is more proof that you really are a corporation. Another benefit of having a board of directors is when the CEO knows he or she has to report to the board of directors at each scheduled monthly meeting.
This fact alone, provides better motivation for a CEO to do a better job. When a CEO knows he or she has to report to the board at scheduled monthly meetings, this factor brings out the best in any CEO. Without this accountability factor, it’s a lot easier to let things slide. Along with accountability, it’s nice to have the friendship and comradery of a board. Your board can provide the moral support you need during times of discouragement, or during tough times. Your board should be made of up of people who have your best interest at heart and want to do everything they can to help you succeed. As you can see, there are so many benefits of having a board of directors with your corporation.
We hope you’ve enjoyed our Blog today. Please remember, TOP CFOS offers the finest CFO professional services to companies anywhere in the world and would love to be a part of your team. Feel free to reach out to us anytime. Your feedback is most welcome, and we invite you to share this post with friends and associates. During the month of June, we are offering a free service to our readers. We will provide a free analysis of your financials, all at no charge. Our contact information can easily be found here on our website, so give us a call today! Our next post will come from the Customer Service category on our website and is entitled Our New Video. And, thank you for joining us!