A Board Director’s Point of View

Early-stage startups, especially those with institutional investors, will establish a governance-focused Board of Directors to help support and oversee the startup’s management. Good Board members will bring thoughtful independence, extensive experience, and constructive attitudes to help the startup succeed, yet when first-time founder/CEOs start out, it is not always easy to sort out how to relate to a Board. Understanding a Board Director’s point of view is a good start.

When I started as a first-time founder-CEO and raised my first investor funds from a group of angels, part of getting the funds was accepting some of my new investors as Board members. All of a sudden my co-founder and I weren’t the only ones calling the shots. Now we had three investor-Board members who wanted to both know what was going on and to share their perspectives. I remember one of the Board members telling me what became pivotal advice, which was that, as CEO, it was my job to lead the Board, which was different than listening to a boss.

Starting with that earliest Board experience, when I served as the CEO-Director, through a number of other private boards until today, when I am now chairing both private and public early-stage boards, I have developed a deeper understanding of the board member value and point of view, which can help founder-CEOs as they learn to engage their Boards of Directors:

• Board members want to see the company succeed. Whether a board member is representing investor(s) or is independent (neither management nor an investor representative), board members are almost universally eager to see the company succeed. They may have to make hard choices; however, the vast majority of board members are involved because they want to help the company succeed. They are investing their time, energy, reputation, and sometimes money in the mission and execution of the organization, so their goal is to help.
  
  
• Board members typically bring deep experience to the table. While a company may have a first-time founder/CEO on the board, most board members bring robust expertise, whether from prior experience as investors serving on boards, as senior-level operating executives, or deep domain knowledge. They are looking to ask probing questions, share insights, and contribute to improving the thinking that is going into making the business thrive – and helping the company’s leaders to excel. Your board members can be great resources if you take the time to engage them.
  
  
• Board members want management to do their job and lead the company, while respecting the input and role of the Board. Good board members are not trying to take over from management in running the company. They understand that the Board of Directors’ role is one of oversight and fiduciary accountability, not day-to-day operations. While especially in early-stage and smaller companies, Board members may have expertise and insights to offer, they should not be focused on being operators.
  
  
• Board members champion the company out in the world. Your board members know what is going on, have invested in learning your story, and they will be looking out for opportunities to bring value and help the company flourish. Keeping them aware of the types of contacts, resources, and opportunities would be helpful enables them to be your eyes and ears out in the world. Plus, they can share the highlights of the company’s story with others.
  
  
• Board members have a fiduciary responsibility to the company, which means making decisions in the best interest of the company as a whole. As Board members live out their duty of care and a duty of loyalty to the company, sometimes that means assessing if a change in management is required to meet the challenges ahead or if a change in ownership (e.g. exit) is appropriate at a given time. Sometimes these decisions are collaborative affairs with the company’s leader(s). Ultimately, however, the Board of Directors must seek to make the best call for the benefit of the company as a whole. Their loyalty is to the organization, not to any individual inside it.

Understanding the role of the Board and the directors serving on it is critical to unlocking the value that an experienced, committed, engaged Board of Directors offers. Don’t sideline them. Engage them. Build relationships with them.  Leverage them.  For the benefit of all.