How to select your board and make them effective
Every startup need to set up a board at some point in time. The questions in the minds of the startup are as follows:
- What stage of my startup should I have a board?
- What sort of a board should I have?
Why would you need an Advisor board?
An entrepreneur normally should select a set of advisors based on the complimentary skills that are needed for the company. For instance, a Finance professional can come on board if the entrepreneur lacks finance talent in the organization.
An investor who has seen multiple exits can come on board if the intent of the entrepreneur is to sell the company at some point in time. This gives a well-rounded skill set to the organization based on the complementary skill sets that the board can give. It is tempting to have high profile names on board to attract the attention of the investor. However, it may not be that great when the investors find out that these board members do not contribute anything meaningfully.
What types of boards
The two types of boards are high involvement and low involvement boards. The high involvement boards spend a lot of time with the organization and the low involvement spends time once a while. The high involvement board spends the time getting into the thick of the action. They take problems and solve those based on their skills. The low involvement boards are involved once a while and they would be involved as a sounding board to take advice that the entrepreneur and team can implement.
How to optimize a boards performance and make it work for you
Many times, the board spends time and attempts to understand what is happening in the organization. However, the team feels that this consumes a lot of executive time. On the other hand, not meeting in constant frequency will not allow the board to give the right kind of advice. So, how to optimize the board and make their contribution effective to the organization.
This depends on the kind of relationship; the entrepreneur has with the board. The entrepreneur can seek their intervention once or twice a month for a few hours. The meetings can happen with these board members in that frequency. The entire board can meet up probably once a quarter. On the other hand, the entrepreneur can keep a few hours extra that can happen on an ad-hoc basis. This is based on emergency issues that need to be closed immediately.
As discussed earlier, you will have to be choosy in identifying the right members for your board This will help you to find the right kind of advice that you would need. You will have to invest the time with them to make them understand you. You will need to update them on all the required information about your organization skills, people, practices, and areas of improvement. You will have to build a relationship with the members to make your board effective. You can then, based on mutual trust, be able to split the responsibilities between you and can scale the startup.