Board report: could a peer board help your business grow?
Many small businesses do not need, or want the expense, of running their own board and that’s fine. But peer boards could offer an alternative, relatively low-cost way, of tapping into impartial advice from fellow business owners. We spoke to two board organisations about what they offer and two business owners about how peer board membership has benefitted them.
Ed Reid, managing director at The Alternative Board (TAB), says there is still some education to be done around peer boards, with many business owners being unsure about what they are. “There are a number of concepts out there and people have heard of it but aren’t sure whether is it networking, a self-help group or something different,” he says.
There are different formats offered by different organisations but, generally, the offering is something like this:
- The business owner pays a monthly fee to the board company.
- The board company puts them on a board of somewhere between around three and twelve (depending on the company model) non-competing businesses. They will usually have a similar turnover or goal, such as high-growth.
- The board meets physically or online once a month in a meeting chaired by a someone from the board company. This person, depending on the model, may act as a time keeper and note taker or they may offer advice. The chair will often be a business owner themselves.
- Board members sign confidentiality agreements and because they are non-competing have no incentive to give anything except impartial advice.
- Depending on the model, board members may be able to access advice from their board chair between meetings or have a one-to-one session with them, for example.
Kevin Sheldrake, founder of The Boardroom Advisory, says being a small business owner can be lonely and being on a peer board with other people going through similar issues can help. “The power of it is community - a supportive group of people who have no agenda other than to just give you honest feedback,” he says.
Reid agrees: “The people who sit around our tables - usually 6 or 7 businesses owners - pay a fee to TAB but they are not paying each other. They have no vested interest in giving good or bad advice.” TAB charges between £400-£800 a month, whereas a non-executive director - a person paid by a company to sit on its board - might cost around £1,000 a month. “You are getting seven brains for the price of one. A non-exec will try to be impartial, but they are being paid by the person who owns the business,” he adds.
The Boardroom Advisory, which runs groups online and across the South Coast, charges a minimum of £125 plus VAT, with more senior boards costing up to £500 a month. “Typical tenure is two years and, bearing in mind they are not locked in, shows the value people have in being part of that community,” adds Sheldrake.
Sheldrake, who offers free taster sessions, says business owners should be careful to only pay for things they need. Some board companies charge a higher rate for a full day a month, including aspects like a guest speaker and lunch, which is fine if you want those things. “There are a number of different providers. Make sure you are comfortable with the person chairing your board, check the pricing and what you get for that and ensure you are only paying for what you want. Look for lock-in periods and the accessibility of your board chair - are they going to try to sell you a one-to-one when you just wanted a quick tip,” he adds.
So why not set up your own peer board rather than using a board company? “The individuals running these businesses are very busy and the last thing they are going to start doing is preparing agendas, arranging the date and getting the venue. They like the fact it is being facilitated,” says Reid.
The issues that come up lots according to Reid and Sheldrake are people-related issues, raising finance, work-life balance, time management and marketing. Those who attend also like that they are held accountable by the rest of the group and board chair for actions they said they would take at the previous meeting. “They don’t want to turn up to the next meeting not having done the thing they said they were going to do,” adds Reid.
Case study 1: The Boardroom Advisory member, Sue Frost
Name: Sue Frost
Job title: Co-founder and CEO of technology start-up Curamicus
What the business does:
Curamicus is preparing to launch CuraPal (registered trademark) - a wearable assistive technology for elders and vulnerable people to help them when they fall and to employ intelligent data processing with the aim of reducing the risk of falls. It spent 2017 raising seed finance for the product and is now preparing to take it to market.
When she joined The Boardroom:
Sue joined The Boardroom in 2016 and says being on a peer board has been “really helpful”.
Why Sue joined The Boardroom:
Sue first came across The Boardroom when she went to a taster session. She says the mix of meeting with her peers and one-to-one advice has been a big support. “The other board members were all very supportive of me last year when I was going through our seed round. I was thankful of having them there each month to keep me focussed and give me encouragement to keep moving forward,” she says.
What does she find most beneficial?
Being held accountable for the tasks set in the board meetings each month has been beneficial, as has having other people’s perspectives. “I would definitely say other business owners should investigate it. It is not for everybody and it comes with a little bit of a cost but, for me, that has paid dividends. It can be quite lonely being a small business owner. You don’t have all the answers and it is just good to have that support.”
Case study 2: The Alternative Board member, Lee Underwood
Name: Lee Underwood
Job title: Managing director at York-based Autohorn Fleet Services
How long has Lee been on the TAB board?
Lee has been on his board for six years. In the past four years the business has gone from £9m to £30m turnover, and despite now having his own company board, Lee still attends the monthly TAB board. “I can’t remember how I found out about TAB but at the time the business was growing very rapidly and I was struggling with advice and help,” says Lee.
What is the best advice you have been given?
Lee has sought advice on many topics over the years and usually the board members all have different advice allowing him to “take a nugget from everybody”. On one occasion Lee was facing a choice of whether to handle an employment tribunal himself, getting a solicitor to deal with it or paying to settle. “I was going to deal with it myself but everyone around the table said get it paid off and get on with what you are good at,” he says.
What is the best thing about the board?
Lee says that over the last six years the group has become more honest and direct with each other. “I don’t think you can go anywhere else where you can get truly impartial advice. In your board there are no hidden agendas,” he explains. The accountability factor is important too. “When you are in charge of your own business there is nobody telling you what to do. With the board meetings, you have to go back in a month’s time and tell the other board members what you did about an issue. You don’t want to look a fool so you do what you have committed to do.”