By Maynard Webb
When I talk with people about their career dreams, I often hear about two distinct paths: moving up the ladder to the executive suite and ultimately the board room or starting one’s own thing and being a founder and CEO, and also serving as a board member.
In my opinion, being a founder or CEO is much harder, but serving on a board has complexity. Being a board member has historically been the capstone of one’s business career and a very sought-after position. It still is, but the work and time commitment have changed dramatically.
Betsy Atkins has served on more than 27 public boards and myriad private boards including Wynn Resorts, Schneider Electric and Volvo and she just wrote Be Board Ready, which answers questions on how to land a board seat and become a great director. She also offers insight on how to handle every complex issue you could have with your board. I’ve included her wisdom on some of the most important questions about selecting board members, preparing for board meetings and ensuring the meetings run smoothly:
Q: How do I pick a board member who can add value? What should I look for? Can I have any influence over what which VC/PE partner gets assigned to my board?
A: It is critical to pick a board member who has passion and conviction around your vision and is able to add a specific set of operational experiences that will help you in going through the growth stage of the company i.e. zero to $5 million, $5 million to $50 million, $50 million to $100 million. You want someone that has scaled and been through that growth journey.
Look for a board member who will be highly engaged and give you time between board meetings to mentor you and your executive leadership team and is willing to leverage their rolodex and relationship capital to help accelerate your business.
Regarding having input to which VC/PE partner gets assigned, this should be a pre-condition of taking money from the firm. You should definitely select an individual that you have good chemistry with and more importantly, select someone who will behave well should you miss your numbers/have a hiccup and who will stay loyal, calm, and constructive in tough situations.
Q: How should I organize the right content for the board meeting? How do I create a meaningful agenda and create support from the board? How do I lead an effective board meeting?
A: Here’s a menu of ideas for leading a great board meeting:
- Have a quick touch base ~ 5 minute call with each director prior to the meeting to find out what’s on their mind.
- Solicit input for the board agenda and identify one or two topics where you want the board members advice and engagement.
- Write a short i.e. two-page CEO letter and send it to the board before the meeting summarizing the key topics that will be covered and outline any subjects where you will seek board input and set the framework for meeting.
- Start the meeting with a CEO “state of the union” 15-minute address. It reinforces your leadership and aligns the board on what are the important subjects that will be covered.
- Be sure to have a read out from your “lead director” after the exec session so that you have visibility to what the board sees as opportunities or concerns and where there may be follow up action.
Q: How do I keep my board members from going off on tangents? Is there a more impactful way to build collaboration between board meetings? What do I do if I have a problem…how and when do I present it to the board? What is the right time to add committees on a private board is and what committees should I add?
A: To avoid tangents in the meeting: Remember, the board members came to contribute and will not sit quietly for 4-6 hours. You need to focus them on a topic where you seek their advice; it will make them feel valued and you will get the benefit of their experience. For example, if you are considering how to best accelerate go to market, you might tee this up by saying “Let me share managements view on go to market….” Then ask the board for their input on a specific topic i.e. international expansion or augmenting with indirect channel/ecosystem partners? Allow enough time for debate and discussion, this makes the meeting valuable for you as well as the board and will avoid tangents.
Definitely bring up problems before a board meeting. It does not go well when the board is surprised and ambushed by an issue. Identify your two to three most influential board members and pre-socialize with them the problem for advice on how to share with the rest of the board.
When you pass the threshold of around $5 million it makes sense to add a compensation committee with one independent member so there is a counter balance to the investor. When you pass $10 million it makes sense to add an audit committee which can be populated by the investors.
I’ve had the opportunity to serve on boards for the past 20 years. Colleagues often ask me how to get on boards and founders often look for guidance on how to manage their boards. It’s great that Betsy Atkins wrote a comprehensive book to help everyone with these issues.