A board of directors is an incredible resource for any growing company. Typically, a board is made up of industry or market specialists, and those who have been successful at undertaking major operational transformations. These individuals will be a sounding board for your ideas and plans, and will also have expertise that fills any gaps in your knowledge.
Here’s how to track down and appoint the best people for the job.
Know your own weaknesses
When looking to appoint directors to your board, it’s important to do a thorough analysis of your own skills, and to look for individuals who have experience and abilities that you lack. "Clearly you want your board to have expertise and a proven track record in the market you’re operating in," explains Ross Boyd, founder of mortgage switching platform Dashly. "If you’re less experienced in any specific area, then plugging that gap with the knowledge and experience of a non-executive director can really pay dividends."
Get the right deal
How much help do you need from your board? Do you want to meet frequently or just a couple of times a year? How much money are you prepared to pay? Are you willing to offer equity in your business? These are all questions that chief executives must ask before embarking on the hunt for a great board, according to Carl Castledine, founder of Away Resorts, the leisure park operator.
"Are you a start-up or a steady-state business?" he asks. "Will you want a non-executive director that can help you operationally or do you need a figurehead/serial chairman? Will they want equity? If so, ensure you have given thought to their expectations."
Sprinkle some stardust
Appointing a stellar board is a way for new or unknown start-ups to gain trust and respect. Boyd explains: "Having the right chairman and balance of non-executive directors can be invaluable not just in terms of the decisions you make as a business but also around the perception potential investors or partners have of you.
"We’re a new type of 'always on' mortgage platform that is continuously looking for ways to save people on their mortgage, something that’s never been done before. So for us having big hitters from the tech, mortgage and financial services world on our board was key."
Boyd has appointed several industry veterans to the Dashly board: "We have Robert Hunt, the CEO of Paradigm Mortgage Services, Mike Bagguley, a former Barclays COO, Jon Claydon, a tech entrepreneur and Mike Harris, the founding CEO of First Direct and Egg. All three have phenomenal experience, contacts and credibility, which can make pre-empting and overcoming obstacles so much easier," says Boyd. "It also makes for good PR."
But don’t just got for the big names
On the other hand, big names can come with big egos, warns Castledine. "There must be chemistry! I have worked with non-execs that are there for themselves and feel the need to take ‘cheap shots’ to prove their worth in the boardroom. They must get on with the management but remain impartial."
He advises any leader to think carefully about the kind of personalities they are adding to the organisational mix. "Give thought to the type and style of your investors. Do you need a harmonious director/chair who will smooth relationships?"
Avoid yes men
Make sure that the individuals you appoint to your board are able to challenge you, advises Castledine. "Don’t be upset or worried if you are getting challenged in your thinking - that’s what you have paid them for," he says. "Listen, learn and modify. A boardroom should never be a territorial place."
In order for the relationship between chief executive and leader to be successful, there must be absolute trust, he adds. "A good non-exec knows how to be discreet and as a CEO you often need a mentor to help with your thinking. Trust is everything."
Do your research; nail the pitch
You may want Richard Branson on your board but would he be interested in your one-year-old start-up? Make sure that the directors you approach are interested in your sector and will be excited by what your company is doing. This means doing your research and then executing one hell of a pitch, says Boyd.
"You need to identify the people who you think would add value according to the roadmap you have for your business and then, the hard bit, set out to impress them with a great deck laying out your plans and vision. It’s not hard to find non-executive directors and board members, but finding the right ones and converting them requires real focus."
As the needs of your business change, your board may need a shake up too. Castledine warns against sticking with non-executive directors that are no longer useful to the business. "Just because they got you here, doesn’t mean they can get you there," he says. "Be prepared to reconstruct your board if circumstances require it."
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