Sergiu Negut, consultant, board advisor, professor at the business school Maastricht School of Management Romania
“Look out for great talent you can’t afford as employees and you won’t attract as investors. Bring them on board as advisors.”
- If the existence of a board is a legal obligation in large organizations, listed on the stock exchange or in regulated industries, there are no such rules within entrepreneurial companies
- However, the existence of a board is essential for taking the entrepreneurial organization to a higher level of development, believes Sergiu Neguț, consultant and board advisor specialized in entrepreneurial growth and organizational transformation, associate dean of entrepreneurial growth at the business school Maastricht School of Management (MsM ) Romania and angel investor in several local companies.
Most of the entrepreneurial companies have no reason to set up a board, but here is my advice: “Look out for great talent you can’t afford as employees and you won’t attract as investors. Bring them on board as advisors. The strategic contribution is huge! ” says Sergiu Neguț.
He adds that, in reality, much of the value is already obtained while preparing the board, because it somehow forces the entrepreneurs to detach themselves from “extinguishing every day fires” and to have an overview of the business, instead. Where board members are valuable people, the climate is also constructive, and the achievement is even bigger. My strong belief in the value of boards was so strong that we created a special project at Romanian Business Leaders – Advisoria, where we help entrepreneurial companies to form their boards as a continuation of the experience gained in other projects: Mentoring and Entrepreneurship Workshops ”, says Neguț, who is a board member in the Romanian Business Leaders Business Organization. He is also a board member for the companies Softelligence and Euro IT Group, where he is also a partner.
Sergiu Neguț had the first experience as board member when the 3i / 3TS investment funds invested in the network of private medical clinics Regina Maria and they formed a board, and he was at that time deputy general manager of the network.
“It was a very pleasant surprise to find that the board did not have a regulatory/controlling role, but it was an extremely valuable strategic forum. During 3i / 3TS period, an independent expert with vast experience was part of the board, hence the discussions were very thorough, based on trust. For me it was an excellent opportunity to see how a good board works, what is the working climate, what are the views, what is the balance between the short term financial parameters and the long term strategic perspective. It was, without a doubt, one of the best boards I was a member of, and I would recommend any of my colleagues at that time to anyone, anytime. But beware: not all boards are the same, they can be antagonistic and inefficient, and they have much to do with the strategic managerial maturity and leadership of those who are in control of the board. ”
Subsequently, Sergiu had several proposals to be part of different boards for entrepreneurial companies and NGOs and accepted some of the offers, where he felt he could bring value and could learn a lot. He says he did not accept all the proposals because he does not want to become a “non-executive director only yet.”
Regarding the most common errors made by board members, Sergiu Neguț says that there are two categories of mistakes: some are related to the control tendency and the level of detail, and others to the working climate.
“A board member cannot substitute for executive management”, which can be quite difficult for board members at the first commitments. Previous management experience can be counterproductive because it is based on a closer control approach and more detailed information. At the same time, the board should be a place for constructive and free dialogue between members.”
However, he says, the most common slippage he has seen on entrepreneurial boards is abandonment. “You need to have an almost manic ambition for the board to make it work, even if you are not obliged to have it, because it means an effort of discipline that is often at odds with the entrepreneurs’ firefighters instincts.”