Entrepreneurs in Australia: Do you need a board of directors?

Editor’s note: this article by me, Rachel Alembakis, first appeared on Zuper Super’s Wealthness hub. Wealthness and Audacious Investing will partner to share relevant writing that we hope will educate our readership.

I officially count my career in journalism as beginning when I was 18 years old, when I had my first paid job as a reporter for the Glen Ridge Paper, a weekly suburban newspaper in my hometown before uni. My salary was $100 USD per week for 10 weeks. I’ve had a lot of fun and done a lot of work from that circulation of 3,000 weekly newspapers to where I am now, but my most enduring role has been working for myself.

Freelancer, solopreneur, self-employed, independent publisher – my title is flexible, depending on whom I’m talking to and why. I began hustling for myself when I moved from the US to Paris in November of 2000. Since then, I’ve done a little bit of everything. I’ve taught English as a Second Language, worked as a pensions and finance reporter for more publications than I can recall, and launched two of my own magazines on sustainability and ethical investment.

When I immigrated to Australia in 2006, I set myself up as a sole trader on the advice of my accountant — who is also known as my husband. (I don’t think it’s necessary to marry your accountant, but you do get a lot of free financial advice that way.) I registered my business name, got an ABN and registered to pay GST. And thus my freelance hustle officially gained status as a business.

That’s all you need in Australia – a few clicks of a button, and away you go. According to the Australian Bureau of Statistics, of the 2.3 million businesses operating in Australia at the end of June 2018, nearly 43,000 were sole proprietors. Being a sole proprietor has minimal legal responsibilities compared to other entities like corporations, partnerships, or trusts. It also allows me the flexibility to work across a number of writing portfolios.

The flexibility of working for yourself and the agility to try your hand at any number of tasks you deem engaging – while worthwhile and financially rewarding – also comes with some drawbacks.

The thing I struggle with the most in solopreneurship is the solo part. I enjoy being able to collaborate, engage with smart people with diverse sets of skills, give advice and be advised. Even though I’m a sole proprietor, I find that my work is more effective when I treat myself as a business. And what do good businesses have? Boards of directors and/or advisors.

According to the Australian Institute of Company Directors, a board is “responsible for the overall governance, management and strategic direction of the organisation and for delivering accountable corporate performance in accordance with the organisation’s goals and objectives.”

I don’t care if you’re a one person operation like me, or if you’re a multibillion dollar multinational corporation – every endeavour needs governance, management and strategy. As a business owner, I have strengths and challenges, and I’m happy to seek out the advice I need to learn form and overcome those challenges.

Therefore, I engage my very own board of directors.

I have a group of women that I turn to for advice, for conversation and to talk about all sorts of things relating to business, sustainability, investment, business life — and they’re all completely different in personality and profession. One is a scientist and academic administrator at an Australian university. One is a professor of business at a US university. One of them is a web developer and graphic designer in the US. Another is a corporate high flyer. One is a fellow niche publisher here in Australia.

You get the idea. My board is diverse in skill set, diverse in geography, and made up of people whom I value tremendously. Years ago, I dubbed these people my board of directors as a half-hearted joke, but in truth, it actually works. I trust them to tell me when I need advice, and they trust me to do the same.

Obviously, this isn’t a legal board – more like an advisory board – but then again, I’m a big believer in self-actualisation. (Or “manifesting” if you will.) I was a child in the 80s in the US; we called this approach, “fake it ‘til you make it.” (I was not only a child of the 80s, I was a child of the 80s in New Jersey, where faking it till you made it was typically accessorised by big hair, French manicures and electric blue eyeshadow… but I digress.)

I call these advisors my Board of Directors much like Frank Frank Sinatra called himself the Chairman of the Board. Ceremonial, a touch aggrandizing, generously meant. (Maybe it’s the Jersey.)

There are things I use my board for and things I don’t. For example, anything that requires actual work related to my business – web design, graphic design, database consultation, etc. Calling on their professional skills is essential to my balance sheet (such as it is) and that is not, strictly speaking, advisory. Don’t confuse getting advice or strategic thinking or support with getting freebies. But sounding boards, professional questions, sometimes research? Absolutely. And my “board” can call on me in the same way.

What should you look for when creating a board of directors for your solopreneur? This video and accompanying article gets it right, in my estimation. “Think about the notion of diversity across all dimensions. You want diversity of thought, diversity of experience, diversity of background, diversity of gender, ethnicity. You think about the diversity of your business, and having people that have sales backgrounds, that have product backgrounds, that have engineering backgrounds—trying to get a good mix is powerful.”

I have also thought of the pitfalls to my approach – drawing mainly from friends, for example. But these are people who I know will call me out and give me the hard advice when I need it.

Forbes Magazine had a list of mistakes to avoid for start-ups, and if you grade on a curve for not needing the legal structures, the advice is good –

· Having too many or too few board members · Avoiding outside independent directors. · Expecting the board to always support management. · Having the wrong management representation. · Maintaining too little diversity · Lacking commitment and trust in board recommendations.

Those of us who work for ourselves do it for any number of reasons – lifestyle, flexibility, passion, ambition, a unique set of skills that are best used outside of corporate structures, etc., etc. There’s almost as many reasons as there are sole proprietor businesses in Australia! But we take ourselves and our work seriously, and we have many of the same opportunities and challenges as bigger businesses – the need for good governance, management, and strategy.

For me, the ability to get out of my own head and listen to others via my Board of Directors is an unmitigated good. Besides, there are only so many podcasts you can listen to before the people around you start wondering why you’re talking to yourself.