Who Do I Want On My Board Of Directors?

Choosing the right board members is one of the most challenging tasks a company can face. There is an art to assembling a team of advisors that can drive strategy, mentor and guide key executives, deeply understand the company culture, and play nicely with each other in and out of the boardroom.

What is the board’s job? A high performance board will drive strategy, broaden your perspective, and identify obstacles and opportunities. That means you need people who know things that you don’t.  Not your lawyer, not your accountant and not your banker. It means not your friends from the country club, even if they are famous and successful. That’s not enough! You need a mix of voices, chosen for their respective abilities and aptitudes, not just their familiarity with you and your business.

Why? What if you want a new lawyer? What if you want to fire your accountant?  How do you have that conversation at the board level if they are sitting in the room? Here is the rule - if you can pay them by the hour you don’t need to give them a board seat . You can seek their counsel, even invite them to the meeting - they just don’t get a seat.

So who should you target?

• You want people with different perspectives. It is really important to limit the number of insiders and key managers in the boardroom.  You want to be able to have frank discussions, not groupthink.  Diversity matters – make sure your board reflects the range of stakeholders.

• You want people that will challenge your assumptions, not your friends and family. The boardroom isn’t about celebrating your accomplishments, it is about forcing you out of your comfort zone. It is about confronting strategic challenges or difficult decisions that require courage and commitment to a new path.  Everyone is facing the turbulence that the digital transformation has created, forcing many companies to leave behind treasured old ways to seek those new paths. A good board can help.

• No Rookies. Your board isn’t training camp for a sports team.  You want experienced directors who know how to guide you and your team on your journey.

• It is vitally important that your board helps you look through the front windshield, not the rearview mirror. It is tempting to get people who know your industry intimately. That can be a dangerous trap. Retired managers from your industry can be limited by what worked yesterday, and not necessarily expert in what will work tomorrow. In seeking industry expertise for your board, think about cousins to your business.  Think about upstream and downstream from your place in the supply chain.  Think about suppliers and customers, but not people who are doing exactly what you are doing. Diversifying the voice in your boardroom will make you better and smarter.

• Board members with strong networks. A board member is not a salesperson in disguise, but their networks should be an important factor to the contribution of the company’s success. They may have better access to resources and relationships – don’t be afraid to use them.

• Target a Great Manager with Strategic Vision. The future can be a scary place. Having board members that have already climbed the mountain or forded the river can help reduce the fear of the unknown.  A great board member can be a Sherpa as you climb Mount Everest.   Success requires vision and imagination.  It is really helpful in a boardroom to have someone that has a big set of binoculars for eyes that can see far and wide about what is going to happen to you and why.  But vision is not enough.  Vision without execution is a daydream.  Execution without vision is a nightmare.So in order to combine both vision and execution, a talented and successful manager who has sat in your chair and confronted those challenges in their own business, even if it is unrelated to yours, can be a valuable voice in your boardroom.

If your strategy calls for mergers and acquisitions as a core element of your growth plan (not just a one-time thing) bring a deal person on board.  If your plan is to expand overseas, bring someone with deep international market experience on your team. If you need credibility add a prominent name or celebrity director, it will just be money.  I love college professors as board members (I was one!).  They tend to have a perspective on the future that is not shaped by what happened yesterday.  They can provide valuable insights about new directions and new opportunities.  Finally, if you have enough seats in your boardroom it is not bad to have a person who will take you aside and tell you the truth even if it hurts.

Remember – you are assembling a team of advisors to help you drive high performance– seek balance, diversity and wisdom, and build a culture of civility and honesty.

If you have additional questions on Compensation or Governance issues – please comment below! 

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Tune in for our next article that explores picking the perfect board member