Tips For Selecting Your Business’ Board Of Directors
In nearly all aspects of life, it is crucial to surround yourself with smart, experienced and diverse people who challenge your assumptions and helps you grow. When it comes to business, this rule is no different.
As your start-up continues to grow, it is pertinent to create a board of directors to oversee the legal and financial decisions your company needs to make. As stated above, the selection of these members is pivotal to the future and success of your company. Therefore you should search for members who reflect the vision and goals of your organization.
What Is A Board Of Directors
Before selecting your members, you should first understand how a board of directors works. Once your board is selected, their fundamental duty is to oversee the management of the company. Nearly all material decisions affecting a business are decided at the board level where members are typically compensated. However, remember that the type of board needed depends on the kind of start-up, the stage of its growth, and the number of stockholders. For example, the board of a publicly-traded company requires very different expertise than the board of directors for a self-funded business.
Make Your Selection
There is a very general list of qualities that all people should look for when creating their board of directors: experienced, competent, enthusiastic, and honest. All of these seem fairly obvious. Of course, you want someone who is excited about the job and experienced enough to get it done. Clearly, you want someone who is competent enough to understand what choices they are making and are honest about why they are making the decisions. But what qualities should you look for further than those?
Keep the board size at a manageable size. Too many people and you’ll have a disengaged and overcrowded board. Too little and you don’t have enough viewpoints. Decide on a number early on and lock it in.
Look for specific experience. Select a board member who has had a career full of successful fundraising events. Select another member who is best at acquiring new customers. Then another who is best at branding. Bring in complementary skills, but different focuses.Offset your weaknesses with members who provide the strength in areas your company is lacking. The best boards are balanced boards.
Surround yourself with people you can trust. People who can trust will be 100% honest even if you won’t like it; people who want the best for you, the company, and the product. Surround yourself with people who won’t screw you over.
Select board members who are independent of your company. The best choices have absolutely zero ties to the company making the difficult decisions, easier. Long-term planning and protecting the shareholders’ interests should be their primary tasks.
A balanced, qualified and engaged board of directors is one of a startup’s greatest assets, and if your small business is incorporated, a board is required by law. Regardless of the reason for creating your company’s board of directors, a well-chosen board can be the underlying mode to success.
