A well-composed and well-managed board of directors is the most powerful and least utilised transformation tool in Spanish SMEs.
I want to go deeper into the most powerful and most underutilised instrument of corporate governance: the board of directors. Not the pro-forma board that exists in the commercial registry, but a living body with regular meetings, a structured agenda, members who contribute real value, and measurable impact.
Performance supervision. Monthly, the management team presents a report covering financial results, operational KPIs, strategic project status, and treasury evolution. The board reviews, questions, suggests, and demands. The mere existence of this discipline improves company performance.
Strategy definition. The board debates and approves the strategic plan, annual budget, and significant investment decisions — not imposing strategy on the management team, but building it together.
Management talent oversight. The board supervises management team composition, participates in key hires, evaluates performance, and approves compensation.
Risk management. The board identifies and monitors the most significant risks — client concentration, key person dependency, regulatory exposure, financial risks. In family businesses, this function is particularly critical as it introduces external objectivity.
Three to five members is optimal: the owner or owner’s representative, the general manager (if a separate person), and one or two external directors with relevant business experience. External directors should be selected for practical experience, judgement, availability, and the courage to say what they think.
Monthly frequency. Not quarterly, not annual — monthly. Preparation. The management report is sent at least three days in advance. Directors arrive having read it. Structured agenda. Results review, follow-up on previous actions, strategic topics. Formal minutes. Documenting agreements, assigned tasks, and committed deadlines. Constructive challenge culture. Disagreements are welcome. Decisions, once taken, are collectively supported.
In our portfolio, implementing a functional board has consistently delivered: improved reporting (the requirement drives information system implementation), better decision-making, earlier problem detection, and execution discipline. It also makes the company significantly more attractive when the time comes to sell the business or bring in an investment partner.
If I had to choose a single improvement action for a Spanish SME, it would be implementing a functional board of directors. It is the investment with the highest return per euro and per hour I have encountered in my career.
Dirk Manuel Martens Jimenez Founder, Blue Mountain Capital
By Dirk Manuel Martens Jiménez
By Dirk Manuel Martens Jiménez
By Dirk Manuel Martens Jiménez
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