Make or break: The importance of a company board and how to manage it
This is cross-posted from the original article published on Forbes.
Choosing who sits on your company board is one of the most consequential decisions you'll make as a founder. The individuals you select will shape your company's future through critical decisions—from funding rounds and strategic pivots to expanding option pools and setting company direction.
A well-chosen board can drive growth and resilience, while a poorly selected one can hinder progress or even jeopardize your business. The board's dynamic and the guidance they provide will echo throughout your company's lifetime, making the selection, management and maintenance of a strong board essential to your company's success.
Choose wisely.
In the early days of fundraising, it may seem logical to pick board members who cut large checks. While this approach appears straightforward, it can backfire. Anyone can provide money, but not everyone understands your business or knows how to help it grow. The wrong board member can do more harm than good, stalling growth or creating unnecessary friction.
Most startups benefit from a balanced board—combining general startup expertise with industry-specific insights. Generalists offer advice on scaling, acquiring customers and building strong company cultures. They have seen multiple companies through different stages and can provide tried-and-true strategies.
Meanwhile, industry experts offer the nuanced guidance needed for strategic decisions unique to your field. They understand the challenges, regulations and market dynamics that affect your industry. Strive for this balance to get the best of both worlds and ensure your board can offer a wide range of perspectives.
Board members often stay for years, so ensure you genuinely connect with them. Beyond initial impressions, conduct thorough reference checks—reach out to colleagues from their past portfolio companies to get an unfiltered perspective. Select people you can be transparent, honest and receptive with, especially when challenges arise. The right board members will not only offer strategic advice but also stand by you when the going gets tough.
Run efficient board meetings.
Once your board is in place, it’s up to you to run it effectively. As your company matures, board meetings will become more detailed, evolving from brief sessions to full-day discussions. The complexity of your business will increase, requiring deeper dives into strategy, performance and problem-solving.
Use board meetings to review quarterly results and progress on key initiatives. Highlight your pipeline, analyze critical KPIs and discuss major organizational changes. These meetings should be a platform for both celebration and reflection. When things are going well, acknowledge the wins. When things are going awry, don’t sugarcoat the situation. Explain where the plan fell short and outline the steps you’re taking to fix it.
For example, when our company faced stagnating revenue and unsustainable operations, we had to make hard decisions. Thanks to open, data-driven discussions with our board, we navigated these challenges and emerged stronger. The right board members will appreciate honesty and step up to support you when needed. No one wants to be blindsided by unpleasant surprises.
Board meetings are also a rare opportunity to tap into the expertise of seasoned leaders who have been in your shoes. Make the most of this time by asking questions, exploring potential strategies and gaining insights that you can’t get elsewhere. End each meeting with clear priorities for the next month, quarter and year. This reinforces your vision and shows how it evolves over time, giving your board confidence in your leadership.
Build strong relationships.
Since board meetings are infrequent, maintaining regular one-on-one relationships is crucial. Meet with each board member bi-weekly or monthly to provide updates and build rapport. Taking these meetings outside the office—perhaps over coffee or a meal—can foster more open, genuine connections. Understanding what drives each board member and allowing them to understand your motivations creates a foundation of trust.
In addition to regular updates, provide detailed reporting beyond what investors receive. Share monthly happenings, key takeaways and KPIs. These materials keep board members engaged and informed, deepening their involvement in your company's success. When board members feel connected to your company’s progress, they are more likely to offer valuable advice and step in when you need support.
Your relationship with your board should be dynamic, not transactional. Keep the lines of communication open, and make sure they know you value their input. A strong relationship built on trust and transparency will pay dividends in the long run.
Choosing the right board members, running effective meetings and nurturing strong relationships are key to leveraging your board’s full potential. A strong board will stand by you through good times and bad, offering strategic value that can make or break your company. Choose wisely, and you may find your business stronger, more resilient and more successful than ever before.
