Building a great board is only the first step. Once it’s in place, you need to take advantage of its expertise and harness its unique ability to help your business evolve.The key thing is communication. Your board will not function to its full potential unless the communication between the founders, executives and board members is right. Bo Ilsoe of Nokia Growth Partners says dialogue should be ”consistent, open, and truthful.”Dom Watson, who leads Nurole's Scale-Up business, looks at what else is needed to best manage a start-up board.
Get everyone on the same page
More than anything, it’s vital to make sure that:
1. There is a clear strategy in place.
2. Everyone understands it in the same way.
3. The strategy is used to guide decisions.
“You need a strategy that isn’t a woolly vision,” says Barbara Anderson, the chair of Altido. “By strategy, I mean a set of ideas and hypotheses that are backed up as far as possible and routinely tested as you go.”
Get together in a room and discuss what the ambition is. Away days can be a great way of providing time and space to have these sorts of conversations. By agreeing where you are trying to go, and putting in place KPIs to track your progress, it’s clear what the board is there to oversee.
Make room for challenges
In a 2019 KPMG study of start-up boards, founders were asked how well they felt their boards played two key roles – supporting the company and its leaders on the one hand, and challenging them where necessary on the other. 92% said they felt supported by their boards, but only 72% felt challenged.
This is a problem. A board that can’t – or won’t – hold founders to account is not doing its job properly. Sara Harvey, an independent director who works with growth companies, says it’s vital to have tough conversations where necessary. “It should be a safe space, where relationships are strong enough that you can have a frank, open and honest discussion and aren’t afraid to challenge each other.”
That said, it’s important that this willingness to disagree doesn’t pull the board apart. Christine Cross, the Chair of Oddbox, says that for early-stage boards to be successful, you can’t have any sense of “us and them.” To avoid that, executives shouldn’t keep secrets from their board, and if a split starts developing then it should be addressed head-on.
Take tough decisions where necessary
Be clear about the kind of support you want from your board – and be clear if you don’t think you’re getting it. Your board is there to add value, so manage expectations for what that looks like. As she grew into her role as a founder, Tamara Rajah got better at asking for what she needed. “I would set them homework and give them specific actions to help the business, given what they know or who they know.”
Sometimes a board hire doesn’t work out, and in that scenario you need to take action. “You should see it in the same way as your team,” Tamara explains. “You wouldn’t let an underperforming member of your team stay. You have got to have a board that works for you and you need to control that dynamic.”
Have an open discussion about what you think isn't working. Listen to your board member and see if there’s scope to improve the relationship. If there’s not, it’s in everyone’s interests to go your separate ways.
Tamara recommends putting certain check-in points into a board member’s contract, whether that be a funding stage or a certain growth level. This allows everyone to reassess the relationship and make sure it’s still working. It’s also worth having an exit mechanism already worked out so that you know how to manage this process if it comes to that.
Take governance seriously
From board papers and agendas to minutes and action points, it’s worth putting your board on a formal setting from the off. “The more seriously you take it, the better,” says Linda Grant, Chair of Virgin StartUp. “There is too much room to hide in informality."
Don’t see it as a burden that chafes against the high-energy informality of your young company. “It's just parameters and guidelines that help you stay focused on the key things,” Linda says. “And if you really plan to scale this thing, then you're going to have to scale your processes and your governance, so you might as well get going right at the beginning.”
Run board meetings in the right way
A big part of getting the most out of your board will be running efficient and effective board meetings. Usually these will happen every quarter, but some companies prefer every four or six weeks. Whatever rhythm you choose, make sure people have enough time to prepare properly. Board packs will usually be sent out around a week in advance, which gives everyone enough time to read and process them, and raise any issues that might need discussing before the meeting (i.e. if they don’t understand something).
Christine Cross thinks the key characteristics of a great board meeting are:
1. A good agenda with timings and purpose of each section.
2. Good succinct papers that raise questions for discussion/debate.
3. A chair that allows all opinions to be aired and no difficult things left unsaid.
4. A clear idea of what decisions need to be made by the end of the meeting.
The entrepreneur and venture capitalist Mark Suster identifies three key roles for board meetings – advice, approval and taking big decisions. A common mistake he sees is founders providing too much detail, and so the meeting descends into a filibuster, a waste of everyone’s time.
It’s the Chair’s role to keep the meeting on track and ensure that the time is used wisely on the game-changing, strategic priorities, rather than day-to-day issues.(You can read more about the role of the Chair here.
Engage the board between meetings too
In fact, Mark Suster thinks that while board meetings attract a lot of focus, they are the “least valuable part” of a start-up’s relationship with its board. He recommends a “continuous involvement model” where frequent interactions – on the phone or via email/text/Slack etc – create lots of moments where feedback can be offered and decisions sense-checked.
At Altido, CEO Will Parry and Chair Barbara Anderson have a weekly meeting that usually lasts a couple of hours, but they’re in contact a lot between those sessions. They’ll send each other links and questions on Slack, or pick up the phone if there’s something they’d like to discuss.
However you do it, keeping your board involved is crucial (and more regular communication builds deeper relationships). Christine Cross suggests weekly performance data drops so that the board gets regular updates.
Conclusion and further reading
There’s a lot to think about when it comes to managing your board – it can be time-consuming and involve difficult conversations. But it’s crucial: you can build the best board in the world on paper, but reap no benefits at all if you don’t think about how best to use it.
Nurole provides best-in-class hiring for forward-thinking boards. We blend the power and reach of technology with a very human understanding that every role, every organisation and every candidate is different. Contact us to discuss your next hire or find out more about becoming a member here.