And How to Vet Them Appropriately
A productive board of directors is a beautiful thing. It’s an accelerant. The group amplifies a leadership team’s thinking and extends its reach. Great boards open doors, challenge strategy, provide wisdom, and entice talent.
I’ve participated in a lot of startup board meetings — as an officer, director, and observer. I currently sit proudly on two boards (Worklete and Teampay. co), And thanks to the Enjoy The Work portfolio, my partners and I are exposed to dozens more.
Not all boards are well functioning. When speaking to our founders in such situations, we show balance in our guidance. We know we’re only getting the founder’s point of view, and that can be skewed. We’ve written before about how a CEO can run effective board meetings, and others have written great content on this topic. But sometimes, even when the CEO does everything right, the board still underwhelms.
In such cases, the disheartened founder will turn to us and ask, “How does a good board member show up?” I thought sharing my answer in a more public forum might help the next generation of founders know what to look for…
A Good Board Member…
Is prepared.
She has reviewed the prior meeting’s board materials, studied the current meeting’s package, and crafted a set of questions to explore.
Adds value.
She proactively checks in with the CEO and/or founders on a recurring basis for emotional, strategic, and tactical support. She looks for ways to create value instead of just waiting for tasks to be assigned.
Sells the vision.
She promotes the vision to potential customers, new hires, and future investors.
Brings candor.
Even if unpopular or difficult — such as when incentives between the founder and the investor do not fully align — she is fully transparent and unafraid to speak her truth.
Knows the role.
A functioning board of directors ultimately has one responsibility: Fire the CEO or support the CEO all while ensuring good governance to protect the (preferred and common) shareholders.
Empathizes with the founders.
There is no lonelier job in a company than that of the Founder/CEO. S/he has taken enormous risks while working grueling hours at below-market compensation. The good board member never forgets that.
A Bad Board Member…
Is unprepared.
Even worse, he pretends to be prepared by forcing their voice in a board meeting for which they clearly did not study.
Destroys value.
He complains or criticizes without offering thoughtful solutions. They fail to adhere to the credo, “no critique without craftsmanship” (h/t Leslie Fine).
Is predatory.
The startup is just one of many transactions in which he’s involved. He jumps at a chance to expand ownership or push a punitive term during a startup’s moment of distress.
Is disingenuous.
He says one thing during one-on-ones, another during board meetings, and still others when speaking to other board members. He’s political — saying other than what he truly means in pursuit of a selfish agenda.
Oversteps.
The board member believes himself the lord of the company, with a CEO present only to do his bidding. Despite no invitation, he involves himself in company operations, wreaking resentment and confusion.
Vetting Prospective Board Members
Of course, the above two descriptions beg the question, how might you determine in advance the makeup of a prospective board member? I suggest four steps.
- Reference the hell out of the person. You raise money from a venture firm, but you work with a partner. That partner has a history. Go learn it. There is an honor among founders. If that partner has been a bad board member, you’ll hear about it.
- Fight with her/him. You’ve heard from me on this topic before. You don’t need a great board when times are good. You need a great board when times are hard or confusing, or worse, hard and confusing. Those are times when a healthy debate is paramount. Spend enough time with the person to learn how they think, if they welcome disagreement, and if they operate with a low ego.
- Talk about values. Protecting your culture is vital. That also applies to the board room. Hopefully, you’ve spent time crafting your values and instilling them into your company. Your values are the guidepost for decision-making. They matter to you, and they should matter to your board.
- Get a demo. For a typical senior hire, you would ask that candidate to demonstrate their skills. Why should it be any different for a board member? And to be clear, writing a check is not a skill. If you have a company that is performing well, there is ample capital available. Try an open strategy discussion or test their capacity to make industry introductions. Perhaps review the prior board deck together and see what questions emerge.
Too often, founders are passive in early board construction. But while a great board can speed your ascent, a poor one can hasten your demise. Trust us. To enjoy your work fully, you need to enjoy your board members. Choose carefully.