Building a board for the first time is a rare opportunity. As entrepreneurs think about building their Boards of directors for their growth stage when they’re private, then positioning themselves to be public. Here are some learnings/suggestions what to do, and more importantly, what to avoid in building your board.

Having been a serial entrepreneur and CEO (on the receiving end of boards), as well as having served on a very large number of private boards, taken 17 companies through the IPO process, and served on over 30 public boards, here are my observations:

In general, the role of the board is oversight on behalf of the shareholders. In the best of cases the board gives a value added set of oversight that is able to earn your trust. They become a thought partner and mentoring body that maximizes your talents. Directors are an accelerant and competitive asset of your enterprise.

At a minimum, a board should take the Hippocratic Oath to “do no harm” (the patient being the CEO, Founders, and the enterprise). I recommend you pick your board for Character. These are your life boat picks. The people who hopefully will run into the burning building when something unexpectedly negative happens.

They should be problem solvers with courage and decisiveness.

I’d want board members to have conviction that the companies who become enduring generational companies are able to retain their entrepreneur Founders. There is a special vision, drive, grit, and tenacity that Founders bring. We see this in many of our iconic tech Founders, i.e. Facebook’s Zuckerberg, Amazon’s Bezos, Tesla‘s Musk, NVIDIA’s Huang, FedEx’s Smith, Berkshires’ Buffet.

Valuable directors find a way to maximize the talent of their Founders and share the vision of the company’s mission.

Mature boards may become more custodial / oversight, as a characterization larger established enterprises like a Wells Fargo, GE, Procter & Gamble, etc. where the role of the board is to optimize the operation.

Founder led boards need to understand and embrace frequent change.

The best Founder led company board members have been operators. They have built and run enterprises.

You need to pattern match your board members to the growth phase the company is in now, and the growth phase your company faces for the next 3-4 years.   Adapting to high velocity change is an essential skill set. Those who have lived through high change environments learn to embrace and adapt. Directors need to suggest the right amount of process that allows the company to scale without becoming bureaucratic and losing nimbleness and speed.

One of my favorite CEOs’ characterizes it as “being comfortable with making decisions in the ambiguity”.

The board blockers are like cholesterol in the company’s circulatory system.

Director traits to avoid are people who over indexed towards process, procedure, methodology, as opposed to market centric, result oriented and outcomes.

The dynamic environment that companies go through as they move from the prototype stage into production (where the engineering team often needs to move with the product) into the manufacturing stage, involves continuous interaction and optimization. Software enabled hardware may likely have complex supply chains.

This engineering transition into volume released manufacturing production also applies to software companies; who need to adapt their product to global scaling, messaging and positioning for different Use Cases and vertical industry segments.

These introductory phases involve delicate and intensive market feedback in a newly public company. These early phases make for unpredictable and bumpy quarters. Ideally your board that has been through these growth cycles and understands. Find directors who are a supportive resource able to offer useful experiences in adapting to these stages.

The board has done its job if it has built credibility and earned the CEO / Founders trust, and may upon occasion, be invited to roll up their sleeves, lean in and help. Directors need to be invited in by management rather than overstepping.

The board’s role is oversight, not operations. Additionally, Directors need to understand it is their job to find a way to be constructive and add value.

CEOs/ Founders should think about these soft characteristics when they build their board. Recruiting Directors based on high impact resumes may look good for a few moments to the external institutional shareholders. However, being saddled with a board of blockers, who are timid, indecisive, hesitant, process oriented and uncomfortable with change, creates a burden for the company, not a competitive differentiator and an asset.

Boards do not naturally know how to “process-as-a-team”. Weaving the connective tissue among the board members is valuable. We want the board to handle challenges in an effective way rather than becoming slow and obstreperous, requesting more and more data and unable to process and make a clear recommendation as a team.

When you build a board, think about who is that person who will help knit the connectivity across your board, so they “process as a team”.

Adding experienced committee members and committee chairs is table stakes. Effective colleagues and  contributors is the ultimate goal.

Great board members recognize that Founder led companies are special and should retain their Founders.

Here are attributes of great board members and avoidable board blockers:

Great Board Member Attributes:

• Problem solvers/ Active Listeners
• Experience with adversity: Courage
• Experience at your company’s stage of growth
• Engaged and willing to collaborate with colleagues.
• Self-motivated to find ways to add value.
• The ability to build a cohesive board that is knit.
• Founder centric.
• Active listeners.
• Comfortable with change.

Board blocker attributes:

• Has not experienced your size company
• Is not decisive
• Is not comfortable with high velocity of change.
• Believes founders are easily replaced
• Has not been through adversity
• Has not been an operating executive
• Has not demonstrated entrepreneurial thinking
• Corporate speaking / platitudes
• Overly process oriented / valuing process over outcomes.
• These Directors often come from large enterprises where they were a custodian of an incrementally growing enterprise, optimizing it as opposed to innovating and building.

The most important thing that CEOs/Founders need to keep in mind is that you really need your board when something goes wrong. But when things are going right, your board is more light touch oversight.

Remember, do not abdicate the selection of your board. Do not let your “governance processes” take over. You need to have a voice.

CEO’s need to have the ability to veto a board member.

Do not add somebody to your board that you don’t feel good chemistry and good connection with.

Be sure the board that you pick is the board you want in the lifeboat with you for challenging times.

Read original article