t is very important to keep in mind that your board needs competent, skilled, and participating board members. Board members provide strategic advice and lend start-up credibility. When you start recruiting, it is very important to know what kind of skills are needed by the board. Think about the type of problems and goals that your organization is facing right now. For example, when you are struggling financially look for members with strong financial skills.
So before you start hiring your board members, here are some tips for you to make the right choice:
Understand how the board of director works:
The board of directors is appointed by the stockholders of the business and its main function is to oversee the management of the company. In most cases, the day-to-day running of a business is assigned to a group of senior executives who are hired and maintained by the board. Almost all tangible decisions affecting a business (i.e. those outside the normal course of business) are decided at the board level. Members are also often compensated.
Remember, the type of board you need will depend on the type of startup, its maturity stage, and the number of stockholders.
Use your network: Think of former academic and professional advisors, retired managers, and successful entrepreneurs with expertise in your industry, or business discipline, such as marketing or customer service, that goes hand in hand with your startup. If you have investors, use their networks as well.
Put a role description: Putting down a role description on paper will help you know exactly what you want, and will simplify the hiring process.
Choose members that cancel-out your weakness: Many founders are tempted to choose board members with similar skills set as their own. Don’t do that. Good boards are those that choose members with qualities that are imperative to your organization yet aren’t controlled by the founders.
Make sure the board fits well with the startup’s culture: Boards can vary greatly in character. Some are run by one person with outdated ideas, while others are run in concert. The best way to get started is to work on the personality and skills of the founders and contributors.
Be prepared to make changes: When you assemble your first board, be prepared for some changes. Your board needs to be diligent and knowledgeable about every detail, which means they will require regular meetings, updates, and financial statements. Also, be prepare for boards to make decisions that you do not agree with.
While having a board of directors can help an entrepreneur overcome many challenges and provide amazing insights. If you decide you don’t need the level of involvement that comes with the board of directors, consider setting up an advisory board. Advisory boards can offer a lot of strategic advice as directors, but they have no obligation to rely on the company or voting rights, so arrangements are more systematic and ensure that you have full control of all high-level decisions.
Put your board to work: Board members must add value to your business. But they will only do so if you ask them. Always look for the next project for each board member. If you run out of things to do, it’s time to let them go.
Know when to let go: Board members must bring value to you and your company. If they don’t, fire them and replace those who do. You usually do not have that option with the members of the investor board. But when it comes to members of the board of directors; or independent board members, you have the option to replace them.
Do not create anything on the board that does not add value to your business: Many founders / CEOs complain about board meetings because they think meetings are time-consuming and unprofitable. Well, that’s a sign of bad board. Prepare a good board first. Once you have a good board, make sure anything you create for the board (presentations, dashboard, etc.) are things you already use for your business.
Expose your board to business guts: Board members can only help if they understand your market, your business, and your performance. When you feel the urge to hide things from them, you have a bad board. If you don’t think they can understand your business, you have a bad board. Dismiss them and hire the right board. Then open up your business to them. Identify issues that you are struggling with. Then ask them to help you solve it. If they can’t, fire them, and find new board members who can.
You can also hire a board placement firm to help you hire the ideal board member. These companies hold a lot of experience in board placement. So, you can save a lot of effort by hiring one of these.
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