Are you ever going to love your Board?
Roisin King, FCIM, MBA
Where creativity and beauty flourish in people and organisations
There is a lot written about this subject but yet I keep coming across businesses on the verge of scaling up who are reluctant to tackle bringing on a board. "I got to $10 million without it so why bother". Or start-ups who take on "celebrity" board members to impress who? Many CEOs/founders will admit the importance of having a board although we could debate it, but very few actually know how to create and maintain a healthy and effective relationship between the board and the management team. Essentially what would it take to love your board? To think of them as a huge asset to growth.
Where is the love?
- attract investment
- seek advice and wisdom on future direction
- piggybacking off of the board’s credentials and network
We have heard the horror stories and tend to focus on those. But what if boards made life better, our companies bigger and our pay off's quicker?
The multifacets of board-CEO relationships.
Source: management.co.nz
80% of kiwi businesses are in the first 3 categories ranging from very minimum involvement to rather more emerging interactive relationships. Only about 20% are actually ‘optimising’ and take advantages of the pool of wisdom and benefits such collaborative relationship has got to offer.
Why there’s such a problem? - in simple terms
- dysfunctions in communication : no formal role and responsibility clarification
- characteristics and background diversity results in bias, prejudice and potential conflicts
How to foster healthy and effective board-CEO relationships
- communication is the key
- role and responsibility clarification up front
- bring character and credentials, not perceived market credibility or fame
- constructively challenge the strategy in a timely manner
- build up succession so that it is easy and transparent
- Diversity in your customers, diversity in your board!
What about Start-Ups?
Start as you mean to go on is easy to roll off the tongue but very hard to foster while you build the business. When you get it right you will have created a significant asset at the very top of the company. A functioning board will take you through the difficult and best times; their advice will support and help you to cover off the many roles of the CEO. Today, when so many CEOs are being asked to do more with less in the corporate world, why overlook the value that lies untapped at the very top but in the start-up world or let’s face it – the majority of kiwi businesses are small - why would you not work hard to have the best advice and guidance you can.
What works for Start Ups?
You have heard about how important vision and mission are for the company and if you don’t have one please consider developing them. You could start by
- Develop a vision and mission for your board.
- Do a SWOT on yourself and identify the gaps
- Avoid the “friend” trap unless they have the credentials and character you need
- Learn about how boards work
- Develop a check list for execution.
- Make sure you have a written business plan in place
- Be prepared to make changes based on the constructive advice given
- Consider the make-up of your customers and look to have representation on your board. If you sell to young females …….
Remember that you can take the advice and debate the changes. Having to do what the board tells you, in my opinion, is what puts CEOs off forming a board but yet mentors form a huge part of the positive and success factors
Like everything in start-ups or corporate, building your greatest assets to scale and grow is part of the journey. You may in fact love your board, you just might never be "in" love with them!!
Further reading
https://hbr.org/2013/04/what-ceos-really-think-of-their-boards
Great Companies Deserve Great Boards: A CEO's Guide to the Boardroom, By Beverly Behan
https://venturebeat.com/2013/02/10/5-huge-mistakes-startups-make-when-choosing-board-members/