5 Key Characteristics Your Board of Directors Should Have

Bringing in external expertise to aid strategic decision-making can add significant benefits to your start-up business.

But do not fall in the trap of appointing your friends and family as board members. You would destroy your friendship and create significant rifts in your family if things do not go the right way.

The Board members can be – and should be – complete strangers, i.e., individuals you have not gone on holiday with, nor enjoyed a beer in the pub with. They need to be someone you can listen to and respect – and human nature and psychology teach us that we seldom respect our friends, and even more so our family.

Your Board must:

  1. Be entrepreneurial and understand the challenges and risks facing a small business (this is what a start-up is, after all), as well as the opportunities it can/should grab, while exercising real control on your strategic priorities.
  2. Take collective responsibility – legal and moral - and be held accountable for its actions, while removing itself from the daily management of the company
  3. Be aware of – and appropriately supportive – with regard to your immediate needs, yet take those into consideration only in conjunction with your long-term business strategy
  4. Have complete independence and autonomy from any of your competitors, and make sure that each board member signs a ‘Declaration of Interest’
  5. Be focused on your financial needs yet act responsibly in relation to all your stakeholders (partners, staff, consultants, suppliers etc.).

In many countries, the Board has a collective responsibility – i.e., if something goes wrong, every single Board member is held accountable – as well as an individual one: each Board Director needs to ensure they discharge their duties appropriately, legally, and ethically with regard to your start-up and all those your start-up does business with.

You need a Board because its members should be the main drivers of risk endeavours, growth opportunities, commercial issues and more.

As a founder, what you need to concern yourself are the following four steps; if you get them right from the beginning, you will reap their benefits for a long time to come:

  • how many board members would like to have (an odd number is preferred)?
  • what would your Board’s responsibilities be (they can never and should never overlap with the management responsibilities)
  • planning and managing Board meetings (Board meeting agenda, pre-read materials, meeting notes, actions to follow-up on and decisions to implement)

It may be too early for you to have a Chairman/Chair of the Board – in this case, you – as the founder of the business – can preside over the proceeding but in no way should you be allowed to veto a Board decision. That is interfering with the operations/activities of a governance structure you yourself set in place to guide and advise you on your journey to growth and financial profitability.

You do not need to ask your Board to decide on anything, unless you make that clear in the Board structure and responsibilities. You can ask for its advice, and you also need to make sure that you receive that advice in writing (Minute of Meeting) or that the Board meetings are recorded in full (audio and/or audio-video).

You should ask your Board to challenge you, your assumptions, and your operational priorities. Your Board is there to guide and protect you, therefore the competency and expertise of your Board members should be diverse and wide ranging.

If you are unsure where you stand right now, or if you seek clarity on your path to scale or go-to-market, perhaps you need to consider joining our start-up Business Configurator because, in a world where most investors’ attention span is no longer than three seconds (trust us on this!!!), you do need to stand out, don’t you?

We can offer you clear and tangible solutions to all these pinch points and more. And, as a plus, we are solely dedicated to sustainable start-ups. We can help you configure your start-up for both profit and purpose and, after 12 weeks of intensive business coaching, mentoring, dry-pitching, and networking with industry experts, angel investors, venture capitalists and other start-ups in our community, you will see the real difference we can make to your business: we optimise it to be investment-ready.

Join our Configurator to develop your product/service and be confident about what it can deliver to your customer base. Apply now.