Yakky Yak (YY) sells Hockey Fantasy Sports smartphone apps and is owned 100% by Tom Green. Sales and net earnings for its most recent fiscal year total $3 million and $350,000, respectively. Tom started the company after getting his computer programming degree three years ago and the company is has experienced exponential growth. Tom has limited business experience running a growth driven company. As the sole owner of the company, Tom has been contemplating improving the governance structure of YY. However, he is concerned that if an external board is brought in, the members will interfere in his decision-making and freedom to run the company. Part of the reason for considering a formalized governance structure is YY's bank requested that YY provide audited financial statements each year and to improve its governance structure.

Tom would like you to help him understand the purpose of implementing a formal board structure at YY. He would also like to understand the purpose of board committees and what types of committees may be appropriate for YY. He also wonders what a formal mandate would consist of, and how he can be sure that the board is operating effectively.

Finally, Tom has outlined his approach to the board below and put together a list of potential board members who would form YY's first formal Board of Directors. He would like your thoughts on both the board policies he has drafted and the proposed board composition. You should address any weaknesses and provide any suggestions that you have for improvement.

Board policies

1. Board meetings will take place on an as-needed basis when members'schedules allow. The aim will be to meet quarterly. Information will be distributed at the meeting by Tom on an as-needed basis, as determined by him.

1. Some members are concerned about the time commitment. As a result,attendance at board meetings is optional. In lieu of attending, a board member may call in the following day and talk to Tom for an update on what wasdiscussed.

1. Tom will address changes to the board composition on an as-needed basis. An audit committee will be formed, made up of the owner (Tom), Mary, andMike (see bios below).

1. Tom will take on the role of Chair of the Board of Directors. This way he can establish the compensation level for senior executives since he knows the right amount to pay to retain top talent.

Board member composition

Tom has identified the following list of potential board members. They are all people he gets along with easily and they will agree with what he thinks the company needs to do to be successful. He does not expect he will need to compensate any of these people.

Number	Name	Age	Bio
1	Martha Smith	38	Marketing VP at a national TV company who owns the rights to hockey telecasts.
2	John Wright	60	Tom's friend. He has known John since they were met in high school. They play YY's Fantasy Hockey online together currently.
3	Mark Bright	46	Senior Manager in business development at a local consulting firm. Tom's neighbor.
4	Mary Chaten	49	Accounts payable clerk. Coaches Tom's son's hockey team.
5	Kerry Zhange	20	Active online gamer. Won YY's Fantasy Hockey League last year.
6	Don Riddle	51	Vice-president of operations at an Internet company.
7	Karen Kant	58	Created and sold her Internet company for $50 million a few years ago and now is an angel investor. Tom went to school with Karen.
8	Sarah Major	45	Senior Human Resource manager at a local manufacturing firm.
9	David Ready	35	Computer programmer. Friends with Karen Kant.
10	Mike Quinn	60	University professor from Tom's school. Research interest area is spiritual enlightenment.
11	Abe Freedmon	57	Corporate lawyer who works on Public/Private infrastructure projects. Tom met him at a business networking event.
13	Jenna Green	24	Tom's niece who studied accounting at University.
14	James Kean	35	Runs a Baseball Fantasy online website. Tom met James at a gaming conference.

Answer rating: 100% (QA)

ANSWER Implementing a formal board structure at Yakky Yak YY can bring several benefits for Tom Green and the company Firstly a formal board can provide strategic guidance and oversight helping to ste... View the full answer