Last week I introduced this discussion about my friend having the right kind of board serving her organization. Briefly, I told her it depended on where her organization was in its life cycle and what it needs to succeed. Today, in part two I share more of my thoughts on this topic. Let me know what you think-
2. What types of people should I be looking for? (Those with entrepreneurial backgrounds, or those with corporate experience, those with really great leadership skills, or perhaps those with connections to be able to help me?)
Entrepreneurs-yes…people who have to meet payroll and sign paychecks have great perspective and work ethic. I don’t think you need a “leadership” guru at this point. If the business takes off, you might want to add someone with those skills to coach you. At this stage, it’s “all hands on deck” with little structure and a small organizational chart.
3. How many do you think is the right number? I’m not a big fan of decisions by committee — especially when the committee gets bigger, but I also whole-heartedly believe that there is true insight value in a team.
A group of 5-6 should be plenty for now. (as long as they are serious, pull their own weight, attend meetings, etc. If they are the right ones, you will get all the counsel and discussion you need for you (or the directors) to vote and make a decision…
4. What power should I give the board, in terms of making decisions? Or should I use them as more of a sounding board and in an advisory role?
If it’s a true board, the articles of incorporation give directors their authority. If it’s an advisory panel, give enough so you can attract serious, valuable people who will step up and join. Bestowing too little authority or asking good people to merely “play” director/advisor will not be viewed attractively by your candidates and probably will significantly limit your choices.
5. What time expectations do you think are realistic? Do you think quarterly meetings, in addition to a few emails each month would be okay?
I think up to 5-6 times a year (if there are not a lot of other committees to serve on) would be appropriate. Every 8 weeks feels about right for your organization. If these people are really good, you’ll want to be with them 5-6 times yearly plus informally on the phone, coffee, periodic e-mails etc…Whatever you decide, if they agree to join you, they have to feel useful and valued. Or, they’ll join another board that will tap into their skills.
6. In terms of compensation, especially since I am technically still a start-up, do you think I need to pay my board members? If yes, can you give me some idea of what? If not, is there something else I could offer them of value? Should I donate services to their organization or an organization of their choice? Is there enough intangible benefit to being asked to on the board for a growing startup?
For directors, I think level “A” people would expect something…eventually. They get that this is a start up and resources must be reinvested. You may be able to get away with a nice dinner or two during the year. Eventually, as you prosper, compensation would be appropriate. For Advisors, a nice-ish dinner brought in for your meetings might suffice…an occasional gift card to something would be appropriate also…down the line
7. What information will I have to be prepared to give my board? I’m a control-freak (as most entrepreneurs are) and especially when it comes to sensitive data such as financials, etc. But if I want my board to be able to offer real true insight and feedback I realize they will need information. I just want to mentally prepare for this.
You’ll need to work on this personally, since directors should be given access to everything, including financial information. They are your partners and you’ll want them fully engaged with you. (It’s really not that bad, tho having someone question your expenses and decision might really seem uncomfortable at first). Just remember, they are there because they are comitted to your success. Good Luck!
Well, what do you think? Did I cover it all? I’d like to hear from you. Let’s talk…