Cerius Business Today

Pam:               I’m Pamela Wasley, CEO of Cerius Executives, one of the largest North American providers of contract executives for part-time, temporary, interim and consulting assignments. These executives are available to step in the companies on short notice to fill sudden gap in leadership, to run a key initiative, or to provide specialized skills and knowledge for a temporary period of time.

 

BT:                  Welcome to Business Today brought to you by Cerius Executives, one of the largest interim executive and management consulting firms in North America. Today we are joined by Donald Nobel, a technology CFO who has spent a portion of his career as an interim executive. How are you doing today Donald?

 

Donald:            Oh terrific, terrific! Nice to meet you Raj.

 

BT:                  Nice to meet you too! So you actually have a pre-existing relationship with Cerius Executives. We’ve kind of tapped into you to be one of our interim executives and a CFO for some of our clients. That just leads me to wonder. You must have quite a few stories that have to do with startups or situations in which you’ve parachuted in. What’s one of your most memorable assignments, and the results that you achieved?

 

Donald:            Well let’s continue on on the example I just gave. A few years ago I was called in by a friend who had a CEO who couldn’t understand why his company was not profitable. And his company was heading over a 100 million in sales and they were doing a lot of business, a lot of satisfied customers. But believe it or not, he was considering laying off staff members because he just couldn’t figure out what the bottom line problem was. I come in and within a month after analysing the entire company, I realise the sales people were not being compensated correctly and didn’t have the correct incentives to do the job. So I proposed and implemented a compensation plan based on gross profit, not revenue. Within two quarters, gross profit tripled. This enabled the company not only to survive but thrive and continue on by expanding the product line, doing some mergers and acquisitions. And even implementing an entire professional services department.

 

BT:                  Well Don. I wanted to thank you for your time. We really appreciate you joining us. And sharing some of this, actually not some of this, all of this great knowledge and information with us and our listeners. For our listeners we will be back every week with a different podcast covering a different topic, so please stay tuned. Subscribe to us on iTunes, Play Store. And until next time, this is Raj Prasad for Cerius Executives.

Pam:               I’m Pamela Wasley, CEO of Cerius Executives, one of the largest North American providers of contract executives for part-time, temporary, interim and consulting assignments. These executives are available to step in the companies on short notice to fill sudden gap in leadership, to run a key initiative, or to provide specialized skills and knowledge for a temporary period of time.

 

BT:                  Welcome to Business Today brought to you by Cerius Executives, one of the largest interim executive and management consulting firms in North America. Today we are joined by Donald Nobel, a technology CFO who has spent a portion of his career as an interim executive. How are you doing today Donald?

Donald:            Oh terrific, terrific! Nice to meet you Raj.

BT:                  Nice to meet you too! So you actually have a pre-existing relationship with Cerius Executives. We’ve kind of tapped into you to be one of our interim executives and a CFO for some of our clients. That just leads me to wonder, why continue down the interim executive path? I’m sure you get approached with full-time opportunities. Has the right opportunity not come by yet? Have you just fallen in love with being an interim executive so much that your interim executive career might become your next full-time career? I mean what keeps you going with it?

Donald:            Wow. Good question. I’ll answer in part Raj, that of course I get approached by companies that want full-time work, long-term employment. I have also been approached by some of the interim companies I’ve worked for and said can you continue on as a full-term role. I am not sure I explicitly choose not to pursue those, but I do love the challenge that interim work brings to me. I am a puzzle solver.

BT:                  So let me ask you this – next question’s a little hard – Give me one mantra of Don that you use or give when you go into a company that’s either hitting a plateau, or going through growing pains or in the need of a turnaround situation. A Rajisim, one of mine, is what’s the difference between a butter knife and a sword? How you use it. You got a  Donism for me?

Donald:            Well there are some serval mantras that I live by but I would probably say the one I use most often is ‘hope for the best and plan for the worst’. The reason I say that and the reason I use that is when you go into any situation, whether it be a company or a life challenge or any situation, it’s OK to hope for the best outcome possible. However a good CFO, a good COO, a good management consultant should always be planning for all the scenarios that might or could happen. And I try to do that when I go in. I don’t just look for the best outcome and say that’s the one we’re going to pursue. I look at that one and say let’s pursue that one but here are five others ones that I am keeping in my back pocket.

BT:                  That’s actually a really good one. I’m probably going to steal that Don, I’m going to be honest with you.

Donald:            Oh I have a few more if you want them, so.

BT:                  Give me one more. That was actually a really good one.

Donald:            It’s interesting you should ask that Raj because one the other ones that comes up quite often, especially when both entering a company as an interim or choosing an interim, is something I heard from a CEO that I respect probably way more than he knows and it’s a simple statement that says, ‘fast, cheap or good, choose any two’. The purpose of that is you can either have it fast or good, but don’t expect it cheap. You can either have it cheap and good, but don’t expect it fast. There is very rarely a situation where you can have fast, good and cheap and I live by that because that’s true. There are many times that you have to pay more for something that you want fast and you want extremely high quality and there are times where when you come in and try to give the lowest bid whatsoever and ha

Pamela Wasley:           Hi, I’m Pamela Wasley. CEO of Cerius Executives. Cerius is one of the largest North American providers of contract executives of part-time, temporary, interim and consulting assignments. Cerius has a network of thousands of executives form operations, finance, sales, marketing, IT, engineering and human resources. These executives are available to step in the companies on short notice to fill a sudden gap, leadership, to run a key initiative or to provide specialized skills or knowledge for a temporary period of time. Cerius deals with thousands of CEO’s and over the past few years, more and more CEO’s have been telling us that they’re ready to sell the company. However, most don’t realize that they have to get a company ready for sale, and that they have many options when it comes to selling their businesses. Selling a company takes time and lots of preparation, as well as, picking the right partner to sell to. But today, we’ll be talking to four experts: an investment banker, a private equity partner, a CEO who sold his company to his employee- through an employee stock option program also known as an ESOP- and a strategic acquirer. All who can give advice to business owners considering selling their businesses in the next 1-3 years. Let’s look at it from the seller’s point of view. What are the reasons why a CEO would look to sell his company? John, let’s start with you on that one.

John Hammett:            [laughs] Sure. Yeah in the first deal I was involved in as a shareholder where I was in my early 30’s and I was working for an entrepreneur in two divisions. We sold one of those. He said, and this guy was in his mid-50’s and as we were working on the transaction, he said that anytime you have an opportunity to get liquidity in a private company you need to seriously consider it because that’s a risky investment, it’s illiquid and it’s very difficult get out of that unless you go through a transaction like this. And that’s stuck with me. For owner’s create huge value when they build a business in the early stage they take risks because you don’t have as much to lose. But you get to be in your 50’s and you’ve built a company and its worth $20 million, then suddenly you become more conservative. And you do have the risk of losing it all and as you get older, you have as we call lesser runway to get it all back. If you had a bad five years, when you’re in your 30’s that’s one thing but if you’re over 60, a bad five years can really affect things. So I think owners need to always be thinking about how do I exit this investment. Doesn’t mean that the company’s bad, just that as a single investment it’s something to be concerned about.

Pamela Wasley:           How many [Murray speaks] Go ahead Murray.

Murray Rudin:            The one thing to always think about is really the as important as price, particularly if they’re doing a deal where they will continue to be engaged, is the caliber of the firm, the private equity firm that they’re going to partner with, the reputation, the references, the style, the chemistry, the cost. Those kinds of factors. I think the number one mistake sellers make in scenario’s where they intend to roll over significant equity is they obsess over the last few dollars valuation when the really important thing is the quality of people that you’re partnering with.

John Hammett:            I absolutely agree with that Murray. That’s much more important.

Pamela Wasley:           Cal, anything to add to that?

Ca Lai:                        Yeah, I think as a seller you really want to know why you want to exit. I think it’s true whenever you have a chance to get liquidity it’s worth looking at but I think that there are a lot of reasons why sellers want to exit. They want to retire and building a business takes a lot of time, energy and effort and I think after 15-20 years in the seat it’s very tiring. And I know a lot of people, a lot of CEO’s and founders who built b

Pamela Wasley:           Hi, I’m Pamela Wasley. CEO of Cerius Executives. Cerius is one of the largest North American providers of contract executives of part-time, temporary, interim and consulting assignments. Cerius has a network of thousands of executives form operations, finance, sales, marketing, IT, engineering and human resources. These executives are available to step in the companies on short notice to fill a sudden gap, leadership, to run a key initiative or to provide specialized skills or knowledge for a temporary period of time. Cerius deals with thousands of CEO’s and over the past few years, more and more CEO’s have been telling us that they’re ready to sell the company. However, most don’t realize that they have to get a company ready for sale, and that they have many options when it comes to selling their businesses. Selling a company takes time and lots of preparation, as well as, picking the right partner to sell to. But today, we’ll be talking to four experts: an investment banker, a private equity partner, a CEO who sold his company to his employee- through an employee stock option program also known as an ESOP- and a strategic acquirer. All who can give advice to business owners considering selling their businesses in the next 1-3 years. So let’s meet the talent. Our first guest today is John Hammett, an investment banker with Corporate Finance Associates. As a former company owner himself, John understands the unique situation a private company owner who decides to sell. John maximizes their value by finding high-value buyers and negotiating the best price and terms for the clients. Our next guest is Murray Rudin, managing director for Riordan, Lewis & Haden, a private equity firm. Prior to joining RLH, Murray was Chief Financial Officer and Director of business development of Voxel, a medical imaging company. Previous to that, he was the principal of Valley National Investors, a private equity fund based in Phoenix. Murray also practiced law at Riordan & McKinzie, specializing in private equity funds and their portfolio company. Our next guest is Steve LaRue, Vice-Chairman of Rico Solution. His work with strategic buyers and private equity firms over the years to sell and buy companies. His many stories propel when it comes to MNA. Our last guest is Cal Lai, President and CEO of Recom Technologies, a software development shop that builds quality solutions for government and business. Established in 1980, the ownership of Recom sold its business to 600 employees through an ESOP in 2000. 

What would you tell, and I want the advice of this panel, I know what some of you are going to say. But what would you say to an owner on how to prepare his or her company for sale? I mean aren’t there things you need to do before you even start talking to people? Murray let’s start with you.

Murray Rudin:            So, I would say that and this touches a little upon some of the topics Steve covered exceptionally well a few minutes ago. But I would say that the owner needs to take a really honest look and then go. They have to realize that whatever flaws, warts, whatever you want to call them are on business are going to be found. They’ll be better off finding those warts themselves and finding, or mitigating or fix them before they start the process. SO that includes things like, obviously, get all your legal documents really diligently reviewed by a professional, be a lawyer not by your local lawyer. Have definitely get an audit from your financial statements, going back at least 2 or 3 years even if it costs a lot of money, you just want to have that. Because all of these things although they cost a lot of money upfront ultimately yield enormous ROI in terms of getting a better valuation on the back hand. If there are limitations in, as was mentioned, kind of the depth of your management team or you’ve got customer concentrations, supplier concentrations, major contracts that are nearing the end with cus

Pamela Wasley:           Hi, I’m Pamela Wasley. CEO of Cerius Executives. Cerius is one of the largest North American providers of contract executives of part-time, temporary, interim and consulting assignments. Cerius has a network of thousands of executives form operations, finance, sales, marketing, IT, engineering and human resources. These executives are available to step in the companies on short notice to fill a sudden gap, leadership, to run a key initiative or to provide specialized skills or knowledge for a temporary period of time. Cerius deals with thousands of CEO’s and over the past few years, more and more CEO’s have been telling us that they’re ready to sell the company. However, most don’t realize that they have to get a company ready for sale, and that they have many options when it comes to selling their businesses. Selling a company takes time and lots of preparation, as well as, picking the right partner to sell to. But today, we’ll be talking to four experts: an investment banker, a private equity partner, a CEO who sold his company to his employee- through an employee stock option program also known as an ESOP- and a strategic acquirer. All who can give advice to business owners considering selling their businesses in the next 1-3 years. So let’s meet the talent. Our first guest today is John Hammett, an investment banker with Corporate Finance Associates. As a former company owner himself, John understands the unique situation a private company owner who decides to sell. John maximizes their value by finding high-value buyers and negotiating the best price and terms for the clients. Our next guest is Murray Rudin, managing director for Riordan, Lewis & Haden, a private equity firm. Prior to joining RLH, Murray was Chief Financial Officer and Director of business development of Voxel, a medical imaging company. Previous to that, he was the principal of Valley National Investors, a private equity fund based in Phoenix. Murray also practiced law at Riordan & McKinzie, specializing in private equity funds and their portfolio company. Our next guest is Steve LaRue, Vice-Chairman of Rico Solution. His work with strategic buyers and private equity firms over the years to sell and buy companies. His many stories propel when it comes to MNA. Our last guest is Cal Lai, President and CEO of Recom Technologies, a software development shop that builds quality solutions for government and business. Established in 1980, the ownership of Recom sold its business to 600 employees through an ESOP in 2000. Do you have any last minute advice you’d give to business owners thinking of selling their companies? Murray let’s start with you.

Murray Rudin:            Sure I would say, your question highlights one of the interesting aspects of our business which is that when we make the investment, that’s not the end of the road. That transaction is the beginning of the road. And where is, as for example, somebody in John’s position does a transaction he gets a seat and moves on to the next client. We, when we’re doing a transaction we’re just beginning a 5-7 year business marriage, you might call it, with the entrepreneur. So I might say the measure of our success is not when we do the investment transaction, it’s when we exit. And there is a real satisfaction. We sell companies, you know, every year. Probably something in our portfolio turns over one or two transactions depending on the maturity of the company in the light. But there is a real satisfaction after you work with a business and a management team for those many years to see a couple of things happen. Most importantly the entrepreneur realizes their dreams, they get a second bit of the apple, a windfall that allows them to do whatever they want for the rest of their lives. Which is wonderful. You see the opportunity that has been provided for the management team to have the experience of building a great business. And then typically to remain in place with

Pamela Wasley:           Hi, I’m Pamela Wasley. CEO of Cerius Executives. Cerius is one of the largest North American providers of contract executives of part-time, temporary, interim and consulting assignments. Cerius has a network of thousands of executives form operations, finance, sales, marketing, IT, engineering and human resources. These executives are available to step in the companies on short notice to fill a sudden gap, leadership, to run a key initiative or to provide specialized skills or knowledge for a temporary period of time. Cerius deals with thousands of CEO’s and over the past few years, more and more CEO’s have been telling us that they’re ready to sell the company. However, most don’t realize that they have to get a company ready for sale, and that they have many options when it comes to selling their businesses. Selling a company takes time and lots of preparation, as well as, picking the right partner to sell to. But today, we’ll be talking to four experts: an investment banker, a private equity partner, a CEO who sold his company to his employee- through an employee stock option program also known as an ESOP- and a strategic acquirer. All who can give advice to business owners considering selling their businesses in the next 1-3 years. What is some of the mistakes you see business owners make when they try to sell a company today?

Steve LaRue:  Oh gosh. There’s probably four key things I’ve seen in my experience. The first and foremost is that you typically will find, especially sellers of smaller private businesses that they’re pennywise and dollar-foolish. They resist going out and hiring professionals to help themselves in the business. This is probably going to be the single most important financial transaction that a founder’s ever going to have, selling their business. So it’s really important to get professional advices and help them through the process. The second is and perhaps the most, the biggest reason why most deals in experience has failed is because of a sense of valuation by the small business owner. The founder doesn’t accept the unreasonable offer from a seller but also refuses to get a valuation resulting in an impasse [laughs]. I just had this experience, just last week trying to acquire a business and I’m talking to the founder and I finally, just had come straight out and say, “Help me understand, where you came up with this valuation number?” [Wasley laughs] And you get some really, really interesting processes that people go through to value their business. The third is that small businesses tend to have a lack of discipline and the buyer won’t do the necessary preparation in advance sales so sometimes small businesses for example don’t always follow business practices or principles, they have inadequate or improper documentation, and as a result of not having that cleaned up in advance of the sales process, that can result in either a delay or derailing of the transaction. Once the sales process starts, there’s really very little time for house cleaning and so you really need to get your house in order before you enter into the sales process. And then finally the selling process can be long and it requires a tremendous amount of commitment, prime commitment on the part of the founder and often the management team selling the company. And we found in some cases that the founders have either not have the necessary resources or willing to commit the necessary time to file the transaction all the way through to completion.

Pamela Wasley:           Great thanks Steve, and Murray you’re not buying this that owner’s think that their companies worth a whole lot more than they, than you think it is. Are you?

Murray Rudin:            [laughs] I tend to think a line. I tend to believe that, you know, we have as a firm pretty good idea of 30+ years of experience what the kinds of businesses we invest in are worth. Um, you know, in our view when somebody says, well I think it’s

Pamela Wasley:           Hi, I’m Pamela Wasley. CEO of Cerius Executives. Cerius is one of the largest North American providers of contract executives of part-time, temporary, interim and consulting assignments. Cerius has a network of thousands of executives form operations, finance, sales, marketing, IT, engineering and human resources. These executives are available to step in the companies on short notice to fill a sudden gap, leadership, to run a key initiative or to provide specialized skills or knowledge for a temporary period of time. Cerius deals with thousands of CEO’s and over the past few years, more and more CEO’s have been telling us that they’re ready to sell the company. However, most don’t realize that they have to get a company ready for sale, and that they have many options when it comes to selling their businesses. Selling a company takes time and lots of preparation, as well as, picking the right partner to sell to. But today, we’ll be talking to four experts: an investment banker, a private equity partner, a CEO who sold his company to his employee- through an employee stock option program also known as an ESOP- and a strategic acquirer. All who can give advice to business owners considering selling their businesses in the next 1-3 years. Well Cal, let’s talk a little about the ESOP.

Cal Lai:                       Yep.

Pamela Wasley:           So you did that with your company, but you probably could’ve gone out and done a deal with a strategic buyer or a private equity firm or gone through a private investment banker. What was it that, what was the over-arching reason why you went with the ESOP? I mean you could discuss a little to begin with but what were those real reasons and why should any business owner consider it?

Cal Lai:                       You know, we actually did have much better offers. We could’ve sold the company for a lot more money. Probably 50% more money if we took a strategic buyer and as I said earlier we got a couple of them. But as we went through the diligence process, we realized that the company would be a really different company and the founders really felt strongly that they’d spent ... the company started with one guy who built a thousand person organization, and you know one person at a time. And the company had a really strong sense of family values we really believed in doing things the right way and working hard and rewarding staff, we had great perks and benefits that people were highly incentived to perform and stick around. And we really created a family like environment. And we, we knew that once we were hired by a strategic buyer that would kind of like go away and since many, many, many other people in the company had been there through most of that time and contributed a lot to the success of the company, we didn’t think it was fair that we put their jobs in jeopardy or change the culture so I think management was willing, the ownership was willing to take a lot less because they could see the continuity of the organization that was built with a lot of pride in that. And I think if you ask the ownership that sold at the time, they would all tell you that even though they could’ve made more money they felt better about the transaction because the company was able to continue with a set of values and culture that it had built. Many of our key employees were able to continue in their roles, we had a succession plan planned out and put into effect and many of us are still around operating the business. So ultimately we just felt that it was the right decision to make a back of our employees to sell it to them, rather than to maximize our returns and leave them in the bag. So it all comes down to what we talked about before, the seller’s intentions are as an entrepreneur and as a business owner you really have to understand what your ultimate exit and goal is and you know having been through this I can tell you from my personal experiences it’s all about

BT:          Hi and welcome to Business Today, brought to you by Cerius Executive Solutions. Today we are joined by Kristen McAlister and Matt Sauer from Cerius Executives. How are you guys doing today?

Kristen: I’m great, thank you.

Matt:     Great, thank you.

BT:          Great. So today we just want to kind of get right into it. Today’s conversation is about contract executives, interim executive and consultants who were once CEO’s, C-level executives that are either trying to make the transition, have made the transition or are looking for ways to find more consistent work and some tips that may help them. How is it, and I know the answer to this and maybe the answer that I have is the ultimate answer, but for me hiring experience is a lot like shortcuts. If you play video games, it’s like plugging in cheat codes. You’re paying an executive to come in, to give you experience so you don’t make those mistakes that you can only learn via experience. How does Cerius work with companies to kind of explain that? Because when looking at an executive contract they’re usually not cheap. They’re relative because the experience that’s coming in will actually save you and make you money in the long-term. But in that one moment instance where that proposal gets to the client, there could be that feedback or that thought. What would you say to that CEO who’s looking at your proposal going “oh I think this is expensive”?

Kristen: Matt, I’m going to let you take this one first because you are, this is your sweet spot.

Matt:     So first thing that I would say is, I think that we are worth what you pay us to do for you. And I think that if I were hiring, if I were a CEO in a startup situation and I were hiring a head-of-sales in marketing because that’s what I that was where my focus was. And the fact that this executive is going to cost me more than if I went to the marketplace to hire somebody. One of the things that we tend to forget is our executives, almost every one of them have been in the marketplace in a very senior position for 20-plus years. And with that they bring a not only a depth of the knowledge of what their discipline is, but a breath of other knowledge because they’ve been in large corporations or they’ve been in large organizations where they’ve seen more than just their discipline. They’ve been exposed to, many of them they’ve been exposed to acquisitions, divestitures, startups. They know what to look for in addition to just their discipline. So while they’re doing their job in this startup organization, they also can council the CEO, the board and say “now I want to make sure you know that from my experience, this is what you can anticipate on this side over here. Or this is what you should be prepared for over here.” So while they may be paying for sales and marketing, they’re actually getting a whole lot more knowledge, information sharing than they would get if they just went to the marketplace and hired someone who was the head of sales and marketing. And that’s the value that we try to make sure that our clients understand that they’re getting when they engage us, and they engage anyone of our interims that they’re always getting more than what they’re paying for.

Kristen: Some of that depends on what you’re comparing it to. In contrast, if you’re comparing apple-to-apple that’s actually not more expensive. Especially when you look at fully loaded, the time to hire and the cost of [3:35] package when the time comes. For a full-time executive, you only get an interim executive and what you need them to accomplish they’re very focused, they’re accomplishing on that, and that heavily involves HR and office politics [3:48] water cooler. They don’t need to go through iterations, they’re an expert in what they need for what you would… If you’re thinking you need to hire a full-time executive when you can actually have an interim come or part-time come in couple days a week for the next 6 months in order t

BT:          Hi and welcome to Business Today, brought to you by Cerius Executive Solutions. Today we are joined by Kristen McAlister and Matt Sauer from Cerius Executives. How are you guys doing today?

Kristen: I’m great, thank you.

Matthew: Great, thank you.

BT:          Great. So today we just want to kind of get right into it. Today’s conversation is about contract executives, interim executive and consultants who were once CEO’s, C-level executives that are either trying to make the transition, have made the transition or are looking for ways to find more consistent work and some tips that may help them. So the first question I have for both of you is what 3 things would you consider a consultant/ contract-based executive needs to know to be successful as an executive that is no longer part of an organization full time? Kristen?

Kristen: You sure I can’t list more than 3?

BT:          You can go 14 if you want to.

Kristen: [laughs] Obviously there’s a big difference from when you’re going, from when you’ve had a very successful career as a long-term full-time employee inside of an organization, to being someone who has more of a characteristic for you parachuting into an organization for a shorter, medium term time and you’ve got specific objectives to do. It’s far more focused as one person thinks of making that transition as one, you’re always out there marketing, you’re always doing business development. Because you need find a situation. One of the best ways to find a situation is you no longer have a title, you’re no longer AVP of sales. You’re a problems solver. So start looking at your history and in your communications, in your conversation be clear on here’s the type of problems I solve. Most companies don’t say I’m looking for part-time VP of sales. They say I have a sales problem, I can’t sort my problem is. Let me find someone who can solve it. One of those specifics. And the third thing is making yourself memorable. Nothing does that better than numbers. You want someone to be able to meet you today and tomorrow and still remember the types of situations you have solved and what kind of impact you had on them. And those are really the 3 biggest things in making a shift. And I know those are all focused on that marketing and business development, but until you can do that just to get yourself inside an organization, you’re not able to in an area that make an impact. Matt?

Matthew: So, you know one of the best, one of the things that I tell every new executive, new interim that I talk to, they all ask very similar questions of me is you know, how can I be productive? And how much work am I going to get from Cerius? And one of the things that I always tell them is that, you know, the most productive and the best interims are those that use Cerius as only one of the resources. That they constantly need to work at their business. You know they’re used to being under a corporate umbrella, they’re used to having business come at them as opposed to having to go after business. So one of the biggest transitions for them, and one of the best pieces of advice I give is, you know, you’ve got to figure out how you’re going to market yourself. You’ve got to go after friends, family, you go after past acquaintances, you go after past assignments, you talk to everybody that you know about taking an assignment. And don’t necessarily think about an assignment as you know a 6-month assignment or a 9-month assignment which is usually what we provide, but go after a week assignment, a day assignment. Get your name out there so that people know that you are now no longer Mr. or Mrs. Corporate America. But that you are John Smith. And that you are John Smith LLC. And that this is the business you’re in. And you go after that business aggressively and for us, if we have an opportunity for you we will bring it to you. But also for you to be looking for as many opportunities as you can.

BT:          Well Kristen and Matt,

Pam:                      I'm Pamela Wasley, CEO of Cerius Executives, one of the largest North American providers of contract executives for part-time, temporary, interim and consulting assignments. These executives are available to step into companies on short notice, to fill a sudden gap in leadership, to run a key initiative which provides specialized skills and knowledge for temporary period of time.

Today we will be discussing advisory boards and boards of directors and why companies, especially today, need them not only to grow but also to survive in this competitive environment. Our first guest is Ginger Silverman. Ginger is a 25 year veteran specializing in marketing and regeneration. After studying her discipline with the leadership of Fortune 1000 companies, she turned her focus to small to medium family owned businesses with a launch of a private consulting practice Aha! Unlimited. She had served on advisory boards and boards of directors for private, public and non-profit companies including Norco Delivery Services, IVIU technologies, Brain Disease Management, Cutagenesis, Oroscience, Susan G Komen and the South Coast Singers. Our next panelist is Merissa Levin. Merissa is a renowned authour, speaker and expert on boards. Her TED talk 'Women taking their place in the board room’ shares why there's never been a better time to increase the number of women board members. Her most recent book, Built To Scale, discusses how top companies create breakthrough road to exceptional advisory boards. She also writes a monthly column for smart CEO magazines as their board expert. Is ABC's small business expert on the number 1 ranked business show in the DC region: Washington Business Report. Is a board member at SMBC, a technology company located in Fairfax, Virginia. Our third panelist is Jeff Thompson. Jeff served in the board of directors for 10 years at Edelbrock Corporation, publicly traded automotive active market company when the ads back exchange. He was responsible for all financial reporting and served as shareholder liaison. He was also a member of the executive, compensation and audit committees. Alright, let's get to the questions. Merissa, let's start with you. What are the key differences between a board of directors and an advisory board?

 

Merissa:               Well there's quite a few but I would say the most important ones are fiduciary responsibilities. So your advisory board members are people that are hand selected and that don’t have any fiduciary liabilities, or fiduciary responsibility to the company. When you have a board of directors, if they advise the CEO or the executive team in the wrong direction, they're actually liable, financially liable for that advice. An advisory board is really just a team of hand selected advisors, you can take their advice, you can decide not to take their advice but definitely the level of fiduciary obligation is much different between the two structures. That's probably the main difference.

Pam:                      Excellent point Merissa. Anybody else have any other difference between a board of director and advisory board?

Jeff:                       Yeah, this is Jeff. I'd like to say that the advisory board is more of an informal type board consisting of a third-party, typically, and probably not that important factor besides the fiduciary responsibilities. The advisory board has no voting rights. It’s the board of directors that will typically make the votes on behalf of the shareholders.

Pam:                      Great. Thanks Jeff.