Two hours into a recent board meeting, I was fried. My eyes had glazed over, and I found myself wondering: Why do some board meetings leave me energized while others suck the very life out of me? I did the math and came to the sobering conclusion that, in the past fifteen years, I’ve spent thousands of hours in meetings like that one.
If Malcom Gladwell’s 10,000-hour rule is true, then by now I should be something of an expert on boards of directors. I’m not sure that’s the case yet, but I have learned a thing or two in my time as a venture capitalist about how to build a productive board of directors.
Below, my advice to startup founders and CEOs looking to build a board they won’t hate — and might actually love.
1. Understand its purpose
Every board should have a strong sense of purpose. As seasoned investor, entrepreneur and friend of mine, Brad Feld, puts it in his new book, “Establishing an objective outside group is essential for startups, especially to keep you on track, call you out when you flail, and in some cases, save you from yourself.”
According to BoardSource, a board of directors is supposed to remain, “objective, unselfish, responsible, honest, trustworthy and efficient.” a board of directors is supposed to remain, “objective, unselfish, responsible, honest, trustworthy and efficient.” While rules like this may feel overly formal for early-stage companies, if properly observed, these tenets can help you build a strong foundation with your board — and through it, your stakeholders.
Dave Morgan, founder and CEO of Simulmedia (disclosure: a portfolio company), is a master at building effective boards. His boards are a healthy mix of of industry veterans with deep domain knowledge and investor representatives. Dave runs his meetings with a firm hand, but is a good listener and encourages members to challenge him. He is always forward-looking and constantly driving the board to keep pace with strategic choices.
2. Do it with style
What should be a healthy, productive asset can become a source of immense frustration when it doesn’t function properly. So once you have a sense of what your board is supposed to accomplish for the organization, you should think hard about your own style of leadership and organization and figure out how that will be reflected in the structure of your board.
First, be honest with yourself about what you want out of your board and what the ideal relationship with them looks like. For example, some CEOs prefer to tightly control the directors’ access to management, whereas others encourage direct relationships between directors and team members. Either approach can work, but whichever style you choose, it is vital that all parties respect the chain of command and avoid undermining your authority as CEO.
3. Don’t let the inmates run the prison
Similarly, as CEO, you have the authority and the responsibility to run the company. Don’t lose sight of that. Your directors should counsel you — and feel comfortable disagreeing with you — but ultimately can’t make decisions for you. As the leader, you must fight hard for what you believe in. There have been many times when I’ve disagreed with a CEO but ultimately accepted (and supported) their decision. You’re the boss, so act like it.
4. Keep your eye on the ball
Management and investors alike often rely on board meetings to communicate with one another. However, these meetings can easily devolve into a parade of scripted updates and forced strategy sessions if you let them. Structured meetings like these are often a poor venue for productive conversations, since the focus is often on the rear-view mirror rather than current problems and opportunities. There are times when the whole board needs to meet to satisfy basic governance or debate big decisions (like fundings, partnerships or sale of the company.) However, the “meat and potatoes” work of brainstorming about strategy is best handled outside of board meetings. The less structured setting can be a far more valuable way for board members to spend time with executives one-on-one without an audience, making for a more honest and efficient exchange of information.
The job of a founder and CEO can be lonely and full of self-doubt, but understanding your responsibilities as a leader and learning to build and structure a productive board will help you create value for your company and make for a fun and rewarding journey.
By Brady Bohrmann