The Value of a Board
When you spend every day running a company, you can get too close to it to see its faults. Putting outsiders -- such as an attorney, an accountant, a banker and a successful business owner -- on your board can bring an outside view of how your company is operating and ideas of how to improve its performance. Board directors also are good sources of business contacts. In most cases, paying for basic expenses and giving your directors shares of stock are adequate compensation until your company is large and successful enough to pay a director's fee, which can range from a few thousand dollars up to $30,000 or more -- but this latter fee is more typical in public companies. Many boards require that the company carry liability insurance for its officers and directors. If you are not ready to pay the price for such insurance, consider establishing an advisory board.