Preparing the Organization for Growth Patterns of Entrepreneurship Chapter 9

Building the Management Team ä Chief Executive Officer ä Setting Up the Board of Directors –  Control over management –  Select and compensate (and fire, if required) the Chief Executive Officer –  Approve selection, replacement and compensation of senior management –  Nominate directors –  Advance stockholder’s rights –  Review financial performance in detail and keep stockholders informed

Board of Directors-Duties and Responsibilities ä  Participate in preparation and reappraisal of strategic plan ä  Validate major investments, acquisitions and asset sales ä  Confirm major policy changes ä  Approve legal activities ä  Closely monitor legal, ethical and environmental compliance ä  Authorize borrowing and new stock issues

Setting Up a Board of Advisors ä Usually consultants, peers, retired executives, or key investors that provide advice and support to the venture. ä The Board of Advisors differs from the Board of Directors in that it is informal, not an official part of the governance structure and assumes no legal liability. äA sense of reality is important in locating advisors. äThey will act as a sounding board for developing partners, networking, product ideas, and are normally compensated in the form of stock options..

The Entrepreneurial Stages