This week we’ve outlined a four-part series on how to build your board. While entrepreneurs are their own breed of lone wolf by necessity, the wise decision is not always to go it alone. In fact, as seasoned investor and entrepreneur Brad Feld puts it in his new book, “Establishing an objective outside group is essential for startups, especially to keep you on track, call you out when you flail, and in some cases, save you from yourself.”
Like all things, a board of directors is a powerful tool when it is a healthy, well-functioning organism. But that same healthy, productive asset becomes a disastrous waste of time and source of immense frustration when it doesn’t function properly. Part of this depends upon who you choose and what they bring to the table, but it is also depends upon your understanding of the board’s purpose, what personalities detract from collaboration and how to structure your board for the best chance of success.
Part 1: Understanding the Purpose of Your Board
Our inaugural post on this topic dives into the purpose of the board, which can be defined in it’s simplest form as, “a group of elected or appointed members charged with the responsibility of overseeing your company’s activities.” Just as successful companies know why they exists and who they exist for, an efficient CEO understands the board’s purpose. From good faith, loyalty and duty of care to voting rights and beyond, we have seen the benefit of establishing good board practices even for early stage startups.
Part 2: Entrepreneur’s Guide to Composing Your Board
In our second post, we offer a guide to setting up your board and cover everything from the number of advisable members to the number of meetings you need in a year. Perhaps most importantly, we address the issue of communication and how informal gatherings among key members can actually make official board meetings more efficient.
Part 3: Setting Expectations with Investor Directors Is Critical for Your Board
In part three of the series, we talk about the intersection of expectations and reality. While we define a good director as one who, “will make you a better CEO by knowing how and when to challenge you, but avoid undermining you,” the reality is not everyone fulfills this role well. There are seven personalities that frankly are better left off the board. While this might seem harsh, the recommendation is born from the privilege of working with incredible investor directors over the years and watching how that one bad director can poison a culture and derail a business.
Part 4: How to Run a Great Board Meeting
Our final post in this series is about how to run a great board meeting. While this is largely a style choice of the CEO, there are guiding principles that just make the machine run better. Some of those principles are using your corporate attorney, taking advantage of a board package, and finally remembering that the company is bigger than any one person including you.
When built and exercised correctly, your board of investor directors is a powerful resource, helpful even for early stage companies. At this point, we’d love to hear your experiences and what has worked best for you. Let us know in the comments below.