Solutions to ResultsSelecting Your CPA Firm’s Board: Go Beyond the Eeny Meeny Miny Moe
By Steven E. Sacks, CPA, CGMA, ABC
The old saying that a camel was a horse created by committee has an element of truth to it. If you think that everyone on a board or executive committee shares the same opinions, philosophies and vision, then think again.
Participating on a board offers an opportunity to make a positive difference in the direction of the firm or the business. However, in order to achieve optimum performance, there needs to be a practical and effective recruitment and nomination process in place. Problems with boards can emanate from a lackadaisical and irrational approach that firms employ in their recruiting, nominating, selecting and orienting board members.
The bylaws or partnership agreement may involve the president or the managing partner choosing individuals and assigning them the responsibility to recruit (more likely ask offline if there is interest) to fill a seat whose term is ending. This is a formula for chaos. Even if there is a so-called formal committee to make nominations, often there is not a meaningful effort expended. Instead, the nominating committee looks to those partners or principals with whom they are friendly, irrespective of whether they would be suitable for a position that requires interest, initiative, thoughtfulness and vision. Using a “friends and family” approach shortchanges the firm by not choosing the individual(s) who would put the interests of the organization ahead of their own.
Consider the Basics
In order to avoid making a regrettable choice, forget the immediate need and think more long term. Some questions to ask:
- Is the board term of adequate length and the right size?
- Do we have bench strength allowing us to select the right people who can serve in a leadership capacity?
- Do we have a board service orientation plan in place and does it need to be updated?
- Do we have the relevant criteria to measure against potential talent?
- Does our board operate in synch with our overall strategic plan?
There are more questions to consider but these should be addressed at the outset. If your CPA firm has older partners whose focus is creating an exit strategy and you are part of the next generation, you need to have a serious discussion with leadership so that the firm will live on after the partners have retired.
In fact, this is a perfect time to evaluate the structure and governance of the firm and implement the necessary changes that result in making a board position attractive; one that is not overly time consuming, and has a philosophy that encourages reaching consensus without losing a layer of skin.
If the next generation seriously wants to drive the direction of the firm, then make it clear that board service is a commitment not to be taken lightly — that there will be accountability, just as there is accountability in cultivating the next generation of professionals, developing new business, exercising vigilance in collecting receivables and maintaining solid client relationships.
About Steve
Steven Sacks is the CEO of Solutions to Results, LLC, a consultancy that specializes in helping individuals, firms and organizations meet the challenges of communicating with clarity and purpose. Visit his website at www.solutions2results.com.
