A board of directors is one of the most important aspects of a company’s infrastructure. These directors hold special places of authority and responsibility, as they work to help guide the company into success. For entrepreneurs who may be forming a board for the first time, this task can seem overwhelming.
Thankfully there are a lot of ways that you can get the insight and direction you need to not only form your board well but conduct successful board meetings. Carter Reum is a founder of M13, which is a venture engine platform that is dedicated to helping tech start-ups be successful. One of the most fundamental aspects of success for any company is its board of directors.
Here are 3 things you should know that will help you start and maintain a successful board.
Expectation is Everything
The most important thing for young entrepreneurs to know and understand is the purpose of the board. From here, foundationally you can then make the decisions on how to conduct affairs on the board, and what expectations to place on them. Having a firm understanding of the purpose of a board also helps you, as an entrepreneur, know who to invite onto the board.
A board of directors is going to be the primary method by which a company not only attains but secures its shareholders. This is a massively important job and requires the right kind of people. For startup ventures, one of the hardest and most challenging aspects of this process can be creating the board. The board holds unique privileges and power within a company.
One thing that the board is never supposed to do is interfere with the day-to-day management of the company. This is the job of the CEO or executive leader. The board is meant to help ensure that the company maintains its value to the shareholders that they are responsible for. How this interacts with the company itself is all in the results and production of the company.
If for example, a company were to depreciate in value, the board would be responsible for understanding why this has happened. The shareholders would not come to the CEO, or the department heads to investigate, but instead the board of directors. This is where a board is meant to provide governance and oversight for the general health and direction of a company. When the daily aspects of the company are suffering, which may cause the overall value to the company to suffer, the board has a right to investigate and make changes. For example, maybe they need to appoint a new CEO, or maybe a board can help the current leadership overcome a problem that they are struggling with.
This is why knowing what the board is supposed to do will help an entrepreneur put the right people on the board, as well as set expectations. If you or your board don’t know the roles, duties, and responsibilities of a board, then expectations will be lost, and it can be recipe for disaster.
Have a Clear, Well Thorough Agenda
For every successful board meeting, you will have a successful agenda. These are some of the most powerful people in the organization. Even if it’s a small start-up, setting a precedent of respecting the board’s time will be something that pays off in the long run. The importance of a well-thought-out and thorough agenda cannot be overstated.
One thing that can go a long way in helping a board meeting run smoothly, is to send out the agenda with enough time for all the board members to become well versed. If you have the right people sitting on your board, then the most important factor between a successful board meeting, and a discouraging one – is preparation. If you can get a well-written and clear agenda out in time for the board members to be prepared, you can ensure that your board meeting will be fruitful.
Communicate to Tour Board Members Regularly
Another huge factor to having a successful board meeting is to regularly update the board between meetings. Board members have a versed interest in the success and health of a business, on top of holding a place of significant authority and power. Because a board shouldn’t have an active hand in the day-to-day responsibilities of the company, it’s easy for communication to get dropped. When board member starts to feel like they don’t know how their company is doing, it can create confusion or even distrust.
Finding a rhythm of communication that you can implement between yourself and the board can go a long way to foster trust, and help instill confidence in your leadership.
Having a board of directors can be intimidating, but learning how to be successful with your board is attainable. Working with venture engines like M13 and industry leaders like Carter Reum, you can learn the skills necessary to have a successful board for your company. With these three tips, and a willingness to get help where you need it, you can have a successful board.