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Bored With the Board

Reader-to-reader advice.

Bored With the Board
Our 68-year-old family business is faced with restructuring our board of directors. Three of our six directors want out, and I'd like to replace them with outsiders. What mix of business knowledge is advisable? What kind of people are most effective?

David Engel

Chairman

Welders Equipment

Victoria, Tex.

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Although most family-owned businesses cheer the notion of inviting outsiders in, fewer than 10% can speak from experience. Those who can will assure you that the fear of losing control fades as soon as you see how the outsiders' objective input can beef up the bottom line or increase the company's overall competitiveness. You're smart to keep birthright in the proper perspective and to stress individuals' contributions. "You don't want to surround yourself with 'yes people," says Mark Nielsen, president of Wesbar, a maker of marine and agricultural products in West Bend, Wis.

When structuring your board, strive for "economic and personal chemistry" among members, says Léon Danco, founder of the Center for Family Business, in Cleveland. It's critical to save seats for experts in marketing, finance, and manufacturing or technology. Add a person who has grown a company in much the same way you want to grow yours, or someone who knows about the markets you plan to attack next. Welcome a creative generalist who can bring out everyone's best efforts. For more insight, study Danco's book Outside Directors in the Family Owned Business (Center for Family Business, 216-442-0800, 1981, $33.45). If you have any outstanding questions, call him.

Danco describes effective directors as "non-self-interested, risk-understanding peers" because they know their primary function is to support management's and shareholders' goals and bolster their collective wisdom. The best of them can play both business owner's and devil's advocate, since they've been in the hot seat and know what questions to ask. Seek out problem solvers who are articulate, resourceful, cooperative, and willing to share stories of their victories and defeats. Danco suggests another book -- John L. Ward's Creating Effective Boards for Private Enterprises (Jossey-Bass, 415-433-1767, 1991, $27.95) -- as an excellent guide to building a dynamic board of your own.

If you take the time to shop for outstanding people, their input can be invaluable. That's why you should think of fees as mutually agreed-upon tokens of respect and seriousness of purpose. It's appropriate to pay annual amounts ranging from $3,000 to $10,000 for each outside director. For more tips on picking and paying directors, Wesbar's Nielsen recommends the seminars and newsletters offered by the National Association of Corporate Directors (202-775-0509).

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Pledge Drive
Where can I get a list of agencies that raise funds for nonprofit organizations?

John Hammer

President

John Hammer & Associates

Irvine, Calif.

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Most businesses that specialize in fund-raising for nonprofits offer management-, financial-, and marketing-consulting services as well. A list of international members of the American Association of Fund-Raising Counsel (AAFRC; 212-354-5799) is available free. The directory lists principals, locations, and areas of specialization for 25 such businesses and gives tips for choosing fund-raising consultants. AAFRC members have already been vetted: they undergo a rigorous application process and must adhere to strict ethical guidelines regarding conduct and setting fees.

Or you could go the do-it-yourself route. Alan Chambers, executive director of City Cares of America, in Washington, D.C., handles his nonprofit's fund-raising in-house, gathering tips from his area trade association for nonprofits. The Washington Council of Agencies, like its sister organizations in numerous states, holds monthly seminars on fund-raising, management, and networking. Membership fees are on a sliding scale, based on a nonprofit's budget. Call the National Council of Nonprofit Associations (202-785-3208) to find agencies in your area.

For more focused training, nonprofit managers can attend classes at one of 14 offices of the Support Center for Nonprofit Management (415-552-7584), which are scattered across the country. Volunteers from the private and nonprofit sectors teach seminars on management, financials, and computer literacy. The cost is linked to the nonprofit's budget.

To keep in step with nonprofit happenings, Chambers and other industry insiders read "the newspaper of the nonprofit world," The Chronicle of Philanthropy (800-347-6969; an annual subscription costs $67.50). The biweekly covers fund-raising techniques, management issues, and news relating to nonprofits.

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Bootstrapped Brochures
I am a self-employed financial consultant and need to put together a professional-looking brochure or marketing kit. What are my options?

Mukund Junnarkar

President

Premier Financial Services

New York City

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Overall, brochures must appear professional and unintimidating. They needn't be slick on the outside, but the writing must be jargon-free, factual, and crisp. Your objective is to create credibility with would-be clients, says Jeff Slutsky, president of Streetfighter Marketing, a training and development business in Columbus, Ohio. "Customers won't say yes right away, but they will say no if they're not initially impressed."

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