One CEO invited his CPA to join his board of directors to benefit from savvy financial advice.
Back in 1988 John Watters, the chief executive and owner of then two-year-old Arbor Systems, a Carrollton, Tex., computer exporter, knew he needed savvy financial advice to steer the company on its fast-growth path. "But I didn't want to have to pay our accountant every time I called him to bounce an idea around," he recalls.
His solution: "I invited our outside CPA to join our board of directors, which he ultimately served on for five years." During that time the company grew to $3.5 million in annual sales, thanks in part to the certified public accountant's regular input on matters such as how to ensure that receivables would remain healthy as the business expanded into new overseas markets.
Now that the company is making sales in Spain, Canada, Venezuela, and elsewhere, "there have been all kinds of financial issues we've had to research, such as typical collection cycles, different tax situations, and pricing to cover all those varying costs," says Watters. He looked to his CPA board member to supplement his own expertise in sales and marketing. "With him on board, I felt we'd be up-to-date on all the financial issues."
Now that Arbor's sales growth is steadier, Watters considers the CPA's boardroom presence less essential. But 12 to 18 months from now, when the company may begin a new growth spurt, the CEO expects to beef up his board with additional professional expertise.