Q: What is the best way to find the right people to act as your board of directors?
A: Having a team of board members that are balanced, qualified and engaged is one of a business’s strongest assets. This makes the decision of selecting who sits on your board critical, and most people realise this. Board members provide strategic advice and lend credibility to a business, particularly if the directors are well regarded or experienced in the area of business.
However, all of these advantageous don’t come free. Board members have considerable responsibilities and are granted rights, essentially being a fiduciary duty to the company as well as voting rights. These duties give them significant influence over long-term decisions about the company. For all of these reasons, it’s important to take your time to choose board members carefully.
So before you ask someone to join your board, here are some tips to help you make the right choice:
Firstly, keep in mind the kind of board your business needs when selecting. This may depend on your type of business as well as its maturity and shareholders. The exaggerate the point, a p.l.c. will require a very different board to a private company.
Secondly, try to choose members that offset your weaknesses, or that of your existing board. Many founders are tempted to choose board members who possess the same skills set as their own. Worse still are founders and business owners who bring on board members that can be influenced. Don’t bother with that. The best boards are those that bring various core strengths, strengths that are not possessed by the founders.
Thirdly is about corporate culture. Ensure the board fits with the existing culture, as well as appreciates it. Board members often vary significantly in character. Some are dominated, others are opinionated. Some are simply conservative. The best approach for your business to function properly is to ensure that characters and personalities can coexist.
Board members are there to make changes and improve upon the status quo. Therefore, be prepared for such changes. Boards are required diligently stay informed. This means they should want regular scheduled meetings, frequent updates and scheduled financial statements. And yes, boards will make decisions you may not agree with.