Business after business is hampered, rather than supported, by dysfunctional boards. Board members are picked for all the wrong reasons; because they invested, they are a friend, or someone suggested them as a quality executive. Boards are then created out of balance when it comes to the help needed because there was no plan put in place before the selection process started. Egos become the order of the day, and in the end, businesses end up with boards that don’t add value and spend time in operational detail rather than strategic direction and support.
Boards should serve two main purposes. Primarily, your board should help you, the CEO, make better decisions and grow your business more effectively. Second, they must provide the fiduciary oversight needed to manage risk and support shareholder / stakeholder investments; holding you accountable.
If you are setting up a board for the first time, you must build a plan for what you need, from talent to meeting structure and frequency. When it comes to the members selected, you should staff your board with a balanced set of talent needed to help you grow your business. From marketing to financial or development disciplines, it is critical that you staff your board like you would an executive team. Also essential is to get board talent that has the needed experience in your field of operation. If you build a board with significant experience in your field and a balanced set of professional disciplines, you will have a team that can and will help you succeed.
Yes, as you accept equity investments, you will need to allow specific board positions, so in these cases, select the best possible person from the investor group / fund and build the right talent around them to create balance. If you need to increase the size of your board to accommodate, get that done in the investment docs.
It is critical to understand that you, the CEO, need to be running your business, and your board needs to be helping you do so. Your board is not there to manage you (although they clearly have the right), and if you allow them to do so, you will create your own leadership nightmare. Select a meeting frequency that supports what you need. Build a meeting outline that provides the board the needed information to remain comfortable with your progress and when needed, provide strategic input. If you allow your board chair or board in general to get into tactical day-to-day operational issues, you will spend many frustrating hours defending your position to people who only engage in your business a few hours a year. If, on the other hand, you provide board leadership like you do your own executive team, you can create a relationship where you get the support you need, when you need it, without unnecessary projects or procedures.
