Responsibilities for each director – so then there is no confusion or arguments!

[phil79]

Hi all,

I would be interested in your experience of how 2 (or more) directors split the various responsibilities between them of running a company, especially a family company where arguments may become quite a common occurrence!
In your experience, what do you think is best? For example, should the directors sit down and agree something like the following:

Director 1 – Responsible for:
1 – Human Resources, hiring and firing, interviews, etc.
2 – Sales
3 – Fleet of vehicles
4 – etc,

Director 2 – Responsible for:
1 – Running operations
2 – Credit Control
3 – Payments
4 – etc.

The overriding principle here is that while each director would have their own responsibilities, obviously every director has an interest in every part of the business and major decisions should ideally be based on consensus. Also, while director 1 (above) may have responsibility for human resources, director 2 may well have strong input into it as well but the final decision should be with director 1.

I would be interested in know your views, and how it works in your business, especially if it is a family business.

Many thanks,

Phil

 

[phil79]

Hi,

I would be interested to hear people's own views and experiences please......

Thanks,

 

[Mainland]

Speaking from personal experience I would leave this well alone. Business and families are guaranteed to cause problems which can actually end up in family break down. The only family businesses I see working are where sons, daughters etc work there way up through the business eventually taking over form a senior member of the family. This way hierarchy is maintained and everyone knows their role.

Starting a business from scratch is stressful enough without having to involve your family as well. Family life is sacred, don't risk it unless you are 100% sure you are going to get along. Business has a tendency to uncover people's inner demons and you may realise you and your partner are not the people you thought you were.

 

[Scalloway]

I would say the oppoosite. Having everything agreed in writing at the outset will save arguments in the future.

 

[phil79]

Hi,

Thanks for the replies. We are currently in business at the moment so it is not a new business as such. We have been operating for over 3 years. It is just sometimes each of us get frustrated because we think the "other" person is making all the decisions, while in reality that is not the case.

Thanks again,

 

[Mainland]

IMO it will be very difficult to designate different roles now the business is established. If done from day one I can see the benefits but it is going to be difficult to do now. Good luck with it. I wish I we had sat down and defined each others roles before we went into business. Might have been one more for Christmas lunch if we had

 

[Blood Lust]

Hi all,

I would be interested in your experience of how 2 (or more) directors split the various responsibilities between them of running a company, especially a family company where arguments may become quite a common occurrence!
In your experience, what do you think is best? For example, should the directors sit down and agree something like the following:

Director 1 - Responsible for:
1 - Human Resources, hiring and firing, interviews, etc.
2 - Sales
3 - Fleet of vehicles
4 - etc,

Director 2 - Responsible for:
1 - Running operations
2 - Credit Control
3 - Payments
4 - etc.

The overriding principle here is that while each director would have their own responsibilities, obviously every director has an interest in every part of the business and major decisions should ideally be based on consensus. Also, while director 1 (above) may have responsibility for human resources, director 2 may well have strong input into it as well but the final decision should be with director 1.

I would be interested in know your views, and how it works in your business, especially if it is a family business.

Many thanks,

Phil

If its two directors (or an even number of them) then someone needs to have the right to exercise an extra vote during ties.

I think you should avoid a rigid structure where directors have specific responsibilities. Instead be flexible and move everybody about so they all become aware of problems and challenges faced by the business. Maybe you could do it once every 3 months?

Specialisation brings efficiencies but it causes silo thinking (even with directors). By taking them out of their comfort zones (moving them about) you make them act in the best interests of the entire business instead of their own little empires. Thats because being moved about prevents them building little empires.

 

[Nord20]

Seems there is no right answer here, as I completely disagree with the last post - having the directors move around roles would have been an absolute disaster for us, at least in part because we do bring different skills to the table and with the best will in the world, I could sit and stare at a blank piece of paper all day hoping it will turn into an advert, but it won't and I would be miserable as hell.

I run a business with my wife and we both have clearly defined responsibilities. That doesn't mean we don't both pitch in with everything, but it does mean that for any particular task, it is immediately clear whose desk it lands on. Being responsible doesn't mean doing.

Our list (off the top of my head) is something like:

Me:

IT & Communications (website, POS software maintenance, phones, internet, newsletters, etc etc).

Client accounts - dealing with client emails, managing accounts, basically most client communications

Finances - book keeping, payroll, bill payments.

Marketing - fostering relationships (although our manager does most of the leg work), networking, etc.

Legal


Wife:

Managing staff - hiring and firing, creating business processes for staff and ensuring they are implemented.

Daily operations

Promotions/offers

Product & supply sourcing

Scheduling (our business requires a LOT of scheduling)

 

[Blood Lust]

Seems there is no right answer here, as I completely disagree with the last post - having the directors move around roles would have been an absolute disaster for us, at least in part because we do bring different skills to the table and with the best will in the world, I could sit and stare at a blank piece of paper all day hoping it will turn into an advert, but it won't and I would be miserable as hell.

I run a business with my wife and we both have clearly defined responsibilities. That doesn't mean we don't both pitch in with everything, but it does mean that for any particular task, it is immediately clear whose desk it lands on. Being responsible doesn't mean doing.

Our list (off the top of my head) is something like:

Me:

IT & Communications (website, POS software maintenance, phones, internet, newsletters, etc etc).

Client accounts - dealing with client emails, managing accounts, basically most client communications

Finances - book keeping, payroll, bill payments.

Marketing - fostering relationships (although our manager does most of the leg work), networking, etc.

Legal


Wife:

Managing staff - hiring and firing, creating business processes for staff and ensuring they are implemented.

Daily operations

Promotions/offers

Product & supply sourcing

Scheduling (our business requires a LOT of scheduling)

I have worked as some organisations which have had a rigid functional structure and others which were more organic.

The correct structure for him to adopt is dependant on what type of business he will be in. He will need to examine how adaptive to change the business will need to be, the pace of innovation required and if the business is likely to encounter problems frequently.

If it does need to be adaptive, innovative and will likely encounter problems that need to be overcome then silo thinking would harm his business. He should avoid the rigid structure unless he knows how to counter the negative fallout from silo thinking.

If on the other hand the pace of change and developments by rivals are slow or low, and if there is likely to be little need for overcoming problems then he should go for the rigid one. That way the business can capitalise on specialisation.

I would agree that even in a functional structure a couple are unlikely to engage in silo thinking. But between siblings, particulary competitive ones, I can see it happening.