It is a legal requirement that limited companies must have a board of directors. For other business types, e.g. APS etc. is voluntary.

5 things that speak for having a board

• Management work. Existing companies where the owner wants the "aunty board" replaced in favor of a professional board that can support and help them in their management work.
• Specific knowledge. Companies that want to strengthen their knowledge on a management level about specific topics.
• Capital search. Entrepreneurial companies that are in an establishment phase or other companies seeking capital. Eg. when seeking financing from banks or external investors. If the investors see that there are experienced people on the board, it is easier for them to say yes to an investment in the entrepreneurial company.
• Networking. Companies that want to establish networks / contacts with other companies. It is often a problem for smaller companies that they do not have the necessary network for customers and suppliers. Here, a board member who is a well-known name in the industry can perhaps help open doors or point out contact opportunities.
• Generation change. Generational change companies where the owner wants to prepare or ensure the implementation of a generational change. A professional board can act as support for the new generation after the takeover.

Three things that speak against having a board

• Surrender of power. The majority of smaller Danish companies are owned by the director of the company. If the owner-manager creates a professional board, he must necessarily cede power to this, and this means that he cannot decide on major changes and new strategic initiatives in the company in five minutes. He should consult his own professional board first.
• It costs money. If a professional board is to be set up, the members also expect to receive a fee for the work. Costs of DKK 30-100,000 are often a lot of money in a small company.
• It costs time. A board of directors wants to be active both in terms of controlling the company's activities and in pointing out future opportunities. In order to be active, it also requires that it receives processed proposals and calculations on various presentations. It takes time and costs money to prepare these presentations.

Source: Startväkst.virk.dk 

In the past, it has been customary to hire well-known business people, outgoing directors and the like for board positions. The first largely for the sake of prestige, the others because they had the time for board work and functioned as a kind of stepping down from the business world. Fortunately, those times are coming to an end, as more and more companies recognize the value of a professionally run board.

In addition to the mentioned advantages and disadvantages, it is largely about where your company is in its development and your ambitions for it. If your company is mostly a hobby business and you don't have big plans for growth and expansion, then a board will probably be more of a disadvantage than a help.

On the other hand, do you have greater ambitions with your company, e.g. about expanding or internationalising, there can even be very large advantages to be gained by having a board. The board gives you the opportunity to involve experienced people in the decisions such as an internationalization entails.

If you sit on a professional board, it is expected today that you put real commitment and time into the work of the board. Therefore, the trend today is moving towards choosing board members based on their skills and experience and not so much based on their celebrity factor.

So do what you can to get board members with exactly the skills the company needs. If you are facing internationalization or need to develop a new sales strategy, it is of course a good idea to have one or more board members who have experience with it.