As a new contributing writer for Silicon Bayou news, I am happy to report that on a bi-weekly basis I will be providing information on topics that I believe are of interest and can help growing companies. As the former President of the Louisiana Technology Council and an entrepreneur a few times over, I would like to offer some “Tidbits and Tips for Entrepreneurs and Growing Businesses.” My goal is to provide you with some of my experiences and knowledge to help businesses prosper. Today’s topic:
Considerations for Selecting a Board of Directors
Your company is growing and you need more help. As a founder though, you are accustomed to having the final say on key decisions and many entrepreneurs are reluctant to form a board for fear of giving up control; yet most every company can benefit from the involvement of a qualified and independent Board of Directors. Although advice from insiders can be valuable (especially early on), it often reflects a narrow perspective–one company, one industry, as well as one set of issues and challenges. Current employees, friends, and family members are more apt to tell you what you want to hear. But, outside directors can bring in experience that your team lacks and provide the company with more objective advice. For example, if you are expanding internationally a person on your Board with overseas experience would be a huge plus. CEOs of companies that are similar to–but not directly competitive with–your company can offer insight into broader industry trends. Board members who understand the critical issues of audit, compliance, finance, marketing, and strategy and other dynamics is what you should look for depending on your industry. So what should you consider when formulating and selecting a Board of Directors?
- Small, focused boards are generally preferable to larger ones.
- Always have an odd number of board members to avoid deadlocks, as well as several directors who are clearly independent.
- Choose people wisely and those who can participate fully – They must be able to dedicate significant time to your company–not just for scheduled meetings, but also on an ad-hoc basis when time-sensitive challenges arise.
- Respectful confrontation and tension – they help you, not tell you what you want to hear
- A periodic efficient clear and concise reporting process.
- AND… you should never hesitate to ask a Board for help.
Having the right mix of people as a Board of Directors can be an immense help to the growth of your business. If you are interested in learning more about establishing a Board of Directors or implementing other strategies for your business please contact me at mlewis@simmonswhite.com.