Privately-held company boards more important than ever
Serving as a board member of a media company in some cases no longer has the glamour or cache once attached to the position, and the stress in today’s publishing world can bring out the best or the worst in behavior at the board level.
The boards that are best equipped to deal with the turbulent times are the ones that have at their core strong relationships among board members. Those relationships are tested during difficult times. Stress can either fracture relationships or bring them closer. Healthy boards come together during a crisis and work from a foundation of mutual respect and trust. That foundation is essential if boards are to be effective leaders.
The negative economy and business environment, however, is forcing boards to rethink how they function, how they interact with one another, and how they serve the best interests of the company and its stockholders. The days of entitlement board positions are quickly passing, and boards are finding themselves taking on more of an active role in the goal setting and oversight of the company.
A good board has a strong vision statement for the company and can provide wisdom and witness to those it serves. An effective board sees their roles as being a servant leader. They serve the company, management, its employees and stockholders and lead through example, staying in touch with reality.
In today’s publishing world a board of directors must work closely with management in providing support, encouragement and vision. Boards will ultimately be no better than the management team they have selected. They need to provide support, not a rubber stamp, to management and work at being informed. This requires preparation beforehand and working on active board committees between regular scheduled board meetings. The board should work as a unit with management to avoid surprises.
Only a few years ago the most difficult questions boards faced were: “How much more money are we going to make this quarter?” “And, what will be the size of the next dividend check?” Today the questions are vastly different: “Will we make any money this month?” “And, will we be able to service our debt?
For several years, there has been a creative tension between traditions versus change within the industry. The deep problems in the economy have forced both sides of the question to accept the new reality that the world is much different. We see many media companies’ boards struggling with change, but we have seen just as many grow from the process. That growth will ultimately create the atmosphere for innovation that the industry will need to sustain itself.
