Selecting a Board of Directors

A solid Board of Directors can be your company’s most valuable resource. It is a way of leveraging expertise and credibility at the highest level, while still maintaining overall direction of your company.

When to create the board

As soon as you are serious enough about your business, create a Board of Directors. (It is also possible to create a board even before you have created your business. For more on this, see this article: http://www.fastcompany.com/articles/2000/03/l0300a.html)

What size Board?

Generally a board size of about 5 people, including the founder, if he or she is not the CEO, is a good size. Later, if you go public, that number will increase to about 9.

Criteria for Selection

Spartina’s top three criteria for selecting board members are:

1. Diversity
2. Experience
3. Contacts
4. Available Time

Diversity represents both diversity in thinking as well as diversity in skills. A balanced board has people who represent key areas of business, including finance, marketing and technology. Diversity in thinking is a commitment to honest and challenging discussions, in service of the best decisions. People who all think like you do may polish your ego but not your performance.

A wide range of experience gives you access to the expertise that you need to you grow the business. Look for people who have operational experience with start-ups as well as experience with your particular industry.

Contacts is a catch-all term for finding people who expand your networking capabilities in all directions: access to customers, access to investors, and access to other services. Look for people who bring more to the table than just their own solid experience. Someone who has a wide range of contacts and is willing to use their contacts in service of your business is invaluable.

Available Time is a conundrum, as the best people are usually the busiest. Consider recruiting retired CEOs as possible board members. They have experience, contacts and may have more time available to mentor and support your business.

The Secret Ingredient: Chemistry

As you go about selecting and inviting board members, be sure that the chemistry works. The board is first and foremost a collection of people. These people must be able to work well with each other and with you (assuming you are the CEO). Avoid placing people on the board who have political agendas in relationship to each other, or outright personality conflicts. These will only get in the way of smooth functioning.

Getting the “Yes”

Keep in mind as you invite people to join your board that they are busy people, with other commitments. Find a way to tap their enthusiasm for you and for your business, so that the “yes” can be an expression of personal enjoyment as well as business wisdom. Considering the fact that you may be seeing these people once a month for many years, keeping the human and social juices flowing will be the grease for the wheels of business.

See our related articles and resources for more information.