Number of directors

Our firm’s total number of directors will be seven. Reasons for this are that small boards can spend less
time in discussions and make faster decisions, there is also less chance of a dominant member swaying
the group and problems with groupthink. Furthermore, a group of governance researchers from GMI
Ratings performed a study in 2014 for The Wall Street Journal, which supports the notion that smaller
boards are more effective than larger boards. The study revealed that companies with at least $10 billion
in annual revenue that had smaller boards typically produced better returns over a three-year period than
similar-size companies with larger boards. Specifically, smaller boards held an 8.5-percentage-point lead
on returns over companies with larger boards. In taking a closer look at companies with larger boards, the
study states that large boards underperformed smaller boards by 10.85 percentage points ( Price, 2021).
That has to say, our firm would go for quality instead of quantity.
Position’s diversification
In the board of directors, there will be two insider directors, one related outsider and five independent
outsider directors. This might not be an optimal choice to some extent, because outsiders typically do not
have contact with the firm’s day-to-day operations and do not have ready access to detailed information
about managers and their skills. They may lack the insights required to fully and effectively evaluate their
decisions and initiatives, especially when they are busy serving on multiple boards ( Hitt, 2020).
However, for our firm, it is the other way around.The need of understanding the company’s day-to-day
operation can be solved when it has two insider directors that are a chairman (also CEO), and a vice-
chairman which assist the latter on making decision and dealing with other top managers.
A widely accepted view is that a board with a significant percentage of its membership from the firm’s
top level managers provides relatively weak monitoring and control of managerial decisions.With weak
board monitoring, managers sometimes use their power to select and compensate directors and exploit
their personal ties with them (Hitt, 2020). Since the company’s priority is transparency and fairness,
outside independent directors can definitely provide the key to these criteria besides many other benefits.

Board of directors
Insider directors

- Chairman/Chief executive officer

This is the highest position on the board of directors. The person holding this position is the founder of
the company, and has a background of long-term knowledge and experience in the beverage industry in
general and coffee in particular. Holding the position of CEO at the same time makes this director's
responsibility higher, so this person will have to be a pioneer, an innovator, and a model for the rest of the
company to follow. Since the company's motto is "positive thinking", the leader will carry the model of
positive leadership. When dealing with decisions and adversity through use of a positive leadership style,
the organization will more likely reap the desired results, especially when our society as a whole related
to focus on the negative outcomes of a given action (Newstrom, 2014, pp.141).

- Vice chairman

Since the amount of work that CEO duality has to carry will be more than usual, the role of a vice-
chairman would be crucial. The person taking this position will assist the leadership in devising a strategy
in line with the given visions. Since the day-to-day operations require a lot of observation, the vice
president will be more likely to pick up this role and together with the chairman to make decisions based
on what is observed. The vice-chairman of a company is usually the second or third in command and will
step in when the chairman is unavailable. With the given responsibilities, the background of the person
taking the position will, like the leader, have a deep understanding of the coffee&beverages industry, and
have good verbal communication skills to deliver ideas to other top managers effectively. In particular,
the vice-chairman needs to understand how to be both leader and supporter, which allows him/her to
fulfill the respective roles to Senior Executives and lower-level personnel.
Related outsider director

- Coffee&tea main supplier

Our only related outsider director will be the main supplier since one of our core competencies is to
maintain the relationship with a core supplier to reduce cost as well as maintain the product's quality. This
director’s background will be a long experience in terms of agricultural planting, coffee&tea to be more
specific.
Independent outsider directors
The board members increasingly are expected to provide resources to the firms they serve. These
(1)

resources include their personal knowledge and expertise and their relationships with a wide variety of
organizations (Hitt, 2020). This will be our core criteria in terms of non-executive chair.

- Outsider director serving in board of an investment firm

This person’s background would be holding a senior position in the financial sector with long-term
experience, so that he/she can provide useful advice to strengthen financial strategies as well as expand
opportunities for the company to invest in many areas. More specifically, by not involving day-to-day
operations, this financier will be able to organize the audit commitee of the firm, thereby increasing
fairness and transparency.

- Outsider director serving in board of a technology firm

Scaling up a company requires many factors, and technology is one that must not be neglected. As
innovation being a core mission, we need a partner in terms of technology that can help a company grow
faster through digitization, as well as boost marketing through the platforms they develop. This non-
executive chair needs a background of expertise in the field of technology and have long experience in
strategic planning in order to provide unbiased but still quality opinion to the board.

- Outsider director serving in board of a food&beverage company

This director needs a background of expertise in food&beverage industry, management and especially
customer experience. As the qualities stated and the benefit of working in a same sector with our
company, this person would be able to provide unbiased and more varied perspective on accelerating
firm’s product in a way that is relevant to our customers and inspiring to our partners. He/she will serve
on the company’s Compensation and Management Development Committee.

- Outsider director serving in board of a retail company

When it comes to unique customer experiences, more retailers are turning to food and beverage to add a
little something extra to their operation. Whether it is a sit-down restaurant or a quick-service counter,
retailers and grocers are finding success with these partnerships, cross promotions and collaborations
(SmartBrief, 2018). Adding an experience or unexpected twist is a way retailer and grocers are
making the move, so we believe that our company’s product can help them with this and
undoubtedly, we will get promising marketing advantages in return. The desired background for
this non-executive chair is the prowess in retail sector as well as large retail network, so that we
can maximize our brand’s apperance all over the country.

References
Price, N. J., & Nicholas J. Price. (2021, July 28). Board size matters: How a smaller board
can be more effective: Diligent. Diligent Insights.
Newstrom, J. W., & Pierce, J. L. (2014). The manager's bookshelf: A mosaic of contemporary
views. Pearson.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2020). Strategic management: Competitiveness
et globalization, concepts and cases. Cengage.
SmartBrief. (2018, April 4). How retailers are using food and beverage to enhance the shopping
experience.