For entrepreneurs, figuring out how to form and run a board of directors can be intimidating and confusing. On the flip side, it is not always clear to board members what their duties and responsibilities are to the company. In this startup boards course, Brad Feld will draw from his recent book, Startup Boards, to illuminate some basics of corporate governance such as why you need a board, who should be on your board, how to run board meetings, and other challenges boards can present. For any startup looking to form a board of directors or anyone looking to or currently serving on a board, this Crash Course is not to miss.
Atul Jha made some notes in the startup boards course video:
- At times you may have members of the Board clueless about products.
- An over absorbing board member could be painful at the meeting. Founders will have to understand and listen to him/her while at the same time focus on the business.
- Ideally, you should restrict to not more than four board meeting in a year.
- The function of the board should not be defined as just a governing body, but be inclined to help the business grow where Board members should invest in creating goals to elevate company standards and setup necessary objectives.
- Just like leadership, setting up a board is no different and should lead and be able to extend leadership qualities over a period of time.
- A board must include trusted mentors, advisors with discrete helpful or supportive roles to play. The dynamics among board members must be cordial and to the betterment of the business.
- Lack of commitment of board members can ruin the company. Identifying the right people at different stages should compliment the skillset and fill in the gaps.
- The CEO must have a clear vision and preferably a rulebook in place that includes building agreement among board to evolve & resolve conflicts.
- The CEO should have a lead director where they go to for suggestions in case of conflict where in most cases this person is identified as the lead investor.
- Advisory boards are proxy setups for getting networks & name drops on slides for the investors. If present, they should be given some equity to get into the engagement cycle for commitment.
- Board meetings are meant for discussions and should not be ruled by opinions.
- It is ideal to send out the board packages at least 48 hours in advance or just use Google Docs where everyone can read, collaborate, comment and have the pitch in place before the commencement of the meeting.
- The CEO should inform the board members and investors what his/her expectations are. This provides a sense of realism which is important for investors.
- CEO should not invest more than 5% of the time in managing the overall board
- An ill-formed board can destroy the company. Invest in collecting and forming a board that is definite to take the company to another level.