“The Boards of Directors are a group of individuals within your company, elected or appointed as representatives of Stockholders / Owners to establish Corporate Governance and oversee Organizational Strategies, Capital Investments, Dividend / Profit share policies and financial accuracy, to name a few”. (Source: BoardTitans.com)
First off, you don’t have to have one. Not every company requires a board. For most super early stage companies, they can create more paperwork and time pressure than they help with. However, as you start to grow and scale, a board can be invaluable in a variety of ways. Here are just a few:
Access to expertise - hiring a perfect team is tough. Finding star players in every aspect of your business from marketing and PR through to BD, sales, engineering and HR is tough. The right board can help with with this. Great board members bring skills, experience, expertise and a wealth of connections that can help with making key decisions. Find people who aren’t afraid to speak their minds. A great hand grenade at the right moment of a board meeting can be the catalyst for amazing things.
Access to experience - startups are hard work. There are a lot of sleepless nights. You become intimately familiar with the curves, contours and cracks of your ceiling. The right board members have frequently been there and done that. They have experience of the highs, lows, ins and outs of running a business and can be incredibly helpful when it comes to helping your company avoid some of the mistakes they made or helping you understand strategic decisions that will benefit your business.
Strategic insight - the day to day of running your company is just that. It’s very easy (and entirely understandable) for you to get caught up in the operational and tactical decisions that guide your business. The right board will provide an opportunity to step back and think more strategically about your company, your industry, your future direction and your long term plan.
Accountability - as the CEO of a company, you are accountable to your board. They, in turn, are accountable to your shareholders. As you think about your companies short and long term planning, they should help you act in the best interest of the business - free from any internal or external politics or pressures. Board members are there to advise and guide you, but they are also there to provide oversight. They have legal and fiduciary responsibilities to the company’s shareholders - which is a powerful motivator.
Credibility - for all companies - particularly those that are early stage or inexperienced in entrenched industries, credibility is key. The right board members can provide that. Leverage their expertise, experience and standing to add weight to your offering. If the smartest person in an industry is on your board, that’s a pretty powerful signal to potential clients, investors, acquirers and others.
Think of your board as a group of people who are there to advise, guide, assist and mentor you. Alongside that, they should be cognizant of their responsibilities from a corporate governance and accountability standpoint - providing checks and balances against any untoward behaviour. Their role encompasses advice, promotion, oversight, mentorship, support and much more besides. Having a well balanced board that complements your team and your business can be the difference between success and failure. Choose well.