The Managing Partner Role: Best Practices

Source: Public Practice

In this continuing series, Bill Reeb reviews best practices regarding how managing partners are elected and for what term, what is expected of them, and how they're protected if removed from that role. In Part 1, he explains how the MP role differs depending on whether a firm follows an “eat what you kill” or “building a village” model. He also discusses the relative roles and responsibilities of the MP and the board of partners or board of directors (“board”).

A common governance issue in professional firms involves the board usurping the MP's role or the MP exercising powers reserved to the board. The MP is responsible for managing the firm's day-to-day operations and directing its people to help the firm achieve the partners' directives, policies, and strategies. The board is responsible for establishing the firm's vision and creating a framework (budgets, policies, procedures, etc.) for achieving that vision. Reeb lists several matters that should require board approval, including approving a sale or merger, bankruptcy or dissolution, initiating or settling lawsuits, and admitting or dismissing partners.

“While the board CAN override the MP at any time,” Reeb says, “the board should work hard not to.”

For the complete article, read “The Job of the Managing Partner – Part 1.” 

From Public Practice, Texas Society of CPAs, February 2014, www.tscpa.org.