One of the most daunting tasks for a young entrepreneur who has successfully acquired funding is selecting a board of directors. One thing you don’t want to do is walk away from your first board meeting feeling like you made poor selections. Keep these things in mind when you are going through the selection process so you can walk away from that first meeting knowing you made the right choices.
Understand your Needs
To understand who you should be targeting for your board, you must first look inward to see what kind of help you need. A board of directors should be able to accentuate your strengths while helping you improve on your weaknesses. Write up a job description containing the expertise you are looking for you help facilitate your search. Make sure you know what role each board member will play wAlso be sure to target individuals who have experience in, or at least an understanding of your company’s market. If you run a tech startup, there may not be much value in appointing a board member who has 25 years of experience in agriculture.
Less is More
One common mistake many first-time entrepreneurs make when they are selecting their board is appointing too many people. A startup does not need a large board of directors as it will only complicate many processes. My ideal number of board members for a startup is five. An odd number eliminates the chance of the board splitting a vote and holding up decisions that will impact the company. By having a small board you can build trust with a tight knit group of individuals who have the company’s best interests in mind.
Variety is Key
At first glance, it may seem like a great idea to have five like-minded individuals with similar backgrounds on your board. In reality, that type of board can be detrimental to the growth of your company. While it is important to have board members with experience in your industry, it is also important to have a diversity in skills and competencies. By having a balanced board, you will ensure that each decision will be analyzed from all angles and backgrounds.
Have Your Company Culture in Mind
Your board may not be involved the day-to-day decisions your company, but they should have the same basic beliefs on company culture as your executives do. If you believe a company with flexible office hours and a lax dress code optimizes your employees’ productivity, then your board should have that same belief. By selecting a board with the same company culture in mind, you eliminate time-wasting conversations in board meetings regarding those decisions.
Use your Network
Some of the best board members come from referrals by those you know and trust. It is likely that you surround yourself with people who have the same ideals as you do, and those people may have the best insight into who could be your next board member. Don’t be afraid to ask the top names in your space to be on your board. You’ll never know until you ask. However, stay away from appointing any friends or family members to your board. It looks bad to investors, other board members, and your employees. It is also difficult for friends and family members to stay objective while making important decisions.
Take your Time
Selecting board should not be an impulsive decision. It could take you months to come to a decision, and there is nothing wrong with that. Your board should be people who have your company’s best interest in mind. You need to be able to trust their decisions and feel comfortable going to them for advice.
It is an exciting time in business when you are ready for your first board of directors, and the task shouldn’t be something that intimidates you. Your board of directors will help you grow your business and open up opportunities for you in the future. Their expertise will also help you grow as an individual and become a stronger leader for your company.