Building a Strong Board - Part I: What to Look for in a Board Member
A good board is a helpful venue to get different but informed perspectives on the business – the board won’t be in the day-to-day of the business, but directors have usually seen similar challenges and opportunities at other companies before. They can apply pattern recognition and situational wisdom to the current situation.
Most Search company boards comprise 3-5 people and typically include the CEO(s), 1-3 investors, and 0-2 independent board members. Occasionally, the seller of the business or its founder may be on the board. Be warned, this can be challenging in the absence of alignment with the new CEO on decision-making or future involvement in the business.
The 3 to 5 board members should fulfill four key expertise archetypes between them:
The goal is to build a board with deep expertise in all of these areas, and a group that works well together to support the CEO. This might mean you have an overlap where one board member covers multiple zones. It’s better to have one person with deep expertise in an area than three who are okay.
A strong board member also meets the requirements of “Straight A’s”:
For specific expertise outside of the four archetypes, ask yourself whether it’s better to get that through an advisor rather than the board. The board should be focused on strategic issues, solving big-picture problems, and holding the CEO accountable. If you find someone with special technical or functional expertise, they’re often better used as an advisor rather than a board member. They might be constrained as a board member versus joining as an advisor who can apply their practical knowledge.
Lastly, think about the board dynamic when choosing board members – the board members are going to communicate a lot with the CEO and with each other. Plan to intentionally create the working environment that you want on your board by building it as a whole rather than evaluating candidates in a vacuum. Think about the different personalities you’re bringing in and how they will interact and support you.
Want more?
Reach out to us if you’d like to talk through putting together a strong board for your company. This is the first in a three-part series. Next time, we’ll talk about sourcing, vetting, and attracting great board members.
