Opinions expressed by Entrepreneur contributors are their own.
Once upon a time, a new startup rushed through the process of bringing board members into their company. Its leaders were young and inexperienced. They went through the process without third-party guidance or a deep dive interview with candidates. They met smooth-talking members looking to be partners and were sold on something grand, but what the candidates delivered was the total opposite.
The partners’ experience was less than they let on. Their mission, vision and values were out of alignment with those of the existing members. Things quickly started to fall apart and the startup founders suffered through years of pain before the company eventually dissolved.
I’ve heard this story many times in my job guiding board formation. So many leaders lament that fewer mistakes would have been made if they had just had connections to more of the right people who matched up with their company’s core values, ambitions and guidance to vet those candidates.
“But none of that happened,” they tell me. “We signed papers and got screwed.”
Not many founders consider their board’s composition, but taking the time and care to cultivate a board of inside and outside perspectives across diverse experiences can be a company’s number one predictor of success. Building a board is a big deal for your company’s success and must be done correctly. Here’s how to do it right.
No better moment than now
There’s no right time to start building a board, but the sooner, the better. If a startup founder only begins exploring potential board members when a problem arises, or a need arises, their plate may be too packed with handling critical issues to do it well. Without the time and attention to make careful decisions about what kind of experience might bring the most benefit to a company, leaders may rush to get someone on board merely out of pressing urgency.
If, on the other hand, you already have a board in place by the time a problem arises, your company has a better chance of handling the situation faster and with more insight to create solutions. Without the task of actively having to put out company fires, you have more time to interview, take a deeper dive into each candidate and fill positions with the best possible people. Start early and build your board before a crisis so your company will have a range of expertise available to help guide you through it.
Evaluate, then evaluate again
Finding the perfect board members who will guide your company to success should take time and commitment. Even if the process takes six months of interviewing over ten executives to bring one onto the board, it’s worth it. Take the time to learn their characteristics, what they bring to the table, and if they would be a good fit with the company partners and other members already on its board.
Consider internal company members such as partners or C-suite executives and new investors who may want a board seat as a condition of their investment. Make sure they can honestly articulate their strengths and weaknesses. Evaluate what they bring to the table and how that might fill gaps in existing board member skillsets. Discuss and make clear the board’s fiduciary and legal responsibilities and personal characteristics that make up a strong board.
It’s essential to bring in board members from outside the company with industry knowledge and valuable contacts. To bring in outsiders that align with your company, first ensure you have all your data. Define your mission, vision, and values. Lay out your strategic plan, goals, and objectives. Then, create an extensive interview process that takes candidates through enough questioning to ensure that their experience, skills, passions, and abilities align with your company’s needs.
Cultivating the right board can drive your company to new heights and provide a safety net for tough times, but it’s a process to be done early, before emergency strikes. Board members can mentor you and your company leadership to achieve their full potential while providing solutions to problems you may never have considered alone. The sooner you take advantage of all a board offers, the sooner your company can accelerate and grow.