Most startups face similar challenges recruiting for their board of directors
Recruiting the talented people you need for your startup company’s board of directors is vital for upscaling a fast-growing business successfully - but it isn’t always easy to get right.
Nurole held a workshop about startup board talent acquisition with 20 high-growth London businesses as part of the London Mayor’s International Business programme, which aims to turn the city’s best new businesses into international powerhouses.
The discussion, held in partnership with London & Partners, brought together leading growing companies from the capital’s technology, life sciences, creative and urban sectors so that they could share stories of their startup board recruitment successes - as well as the problems they’ve faced in getting their startup boards to perform well.
There were many similarities in the concerns they shared before setting up their startup boards. Will the ROI be worthwhile? How can they find the right people? Should it be a startup board of directors or a startup board of advisors? What should the mix of talents be in the boardroom?
The good news is that of those who already had a board (the majority), almost everyone present felt they were getting value from it, and had grown the business effectively with its help. But niggling doubts remained whether some individual board appointments had really delivered - and knowing how to assess the performance of individual startup board members was still problematic.
Define the board’s role clearly
Another key issue reported by attendees was that they hadn’t clearly defined roles on the board, and this led to problems in getting the focus they wanted. For example, if board members start trying to second guess the management teams and took on too much of an executive role; when board members simply identify the problems without helping devise solutions; or, worst of all, when board members aim to score points by highlighting typos in the board pack or the equivalent.
Whatever your core business requirements for growth, be it international experience, strategic vision, scale-up experience, sector expertise or fundraising skills, the workshop reflected that recruiting the right startup board team ultimately has similar rules to making good appointments elsewhere in your business.
Dare to dream about who might be interested in sitting on your board
As well as the problems of not clearly defining roles for a startup board of directors before they join, cognitive diversity was a key issue that came up again and again, and looking outside of your close circle is important if you’re going to get the right blend you need to take a business forward. Statistically, it’s unlikely the best person for the job happens to be someone in your network.
The recommendation was to have a structured recruitment process for your board, not just collect big names when they become available without thinking of the combination of talents a startup board really needs.
But don’t underestimate the appeal of joining a startup board of directors or a startup advisory board - your fast-growing company could become an international hit, offering kudos in the short-term and perhaps a bigger financial payoff further down the line. Nurole has played a role in helping lots of startups connect with successful founders of tech unicorns looking to inspire the next generation. For example, Kreditech, one of Germany’s best known financial services startups were looking to rapidly scale and recently recruited the founder of Zopa - the world’s first peer-to-peer lender - to their board. Successful founders have almost certainly been through the same challenges a new business in the same sector will face, and the experience they can bring to your board is invaluable.
Invest in the onboarding process
Effective onboarding was also cited as an imperative - perhaps more so for a startup board member than a potential employee. Getting them to understand what’s important to you, the culture of your company, and the way your company works is vital for an individual to contribute to a startup board, no matter what talents they have in other fields.
Some startup board members will be proactive, others may need to be pushed in the right direction, but no matter how experienced their background, getting them to know your business inside-out is key to optimise the contributions they can offer.
Performance manage your board
Finally, a process for some kind of performance review of the startup board’s members is crucial, though many at the workshop felt it was a difficult challenge. If you view a review firstly as an opportunity for your business to steer a newly recruited talented startup board director or advisor in the direction you want, then it has to be worthwhile.
Of course, on occasion, you’ll need it to define a set of criteria that means underperforming board members know what is expected of them. Just as your senior management team need to ‘know what good looks like’, so does your startup board, otherwise how will you be able to assess their value?
This final element is not always easy, but a place on your board should belong to someone who can really contribute, otherwise it’s time for them to depart, no matter how big a name they are or how much they were hired for.
The key message for those attending from the Nurole team was simple; “Don’t accept second best”. With the right help and access to a rich pool of business experts, you can find exactly the mix of talents you need to energise your board and make the right decisions for your company.
Register your interest for future events
For companies looking to scale, the right board of advisors can be the route from good to great. However, finding the right people for your board is a real challenge.
At our scale up events we discuss who you need on your board to scale successfully, and help you understand everything you need to know about the board building process.
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