Establishing your Board

A good sounding Board.

For a small or medium sized company where the founder still has all or the fast majority of shares, the Board is somewhat unique. While you are after a Board that will be independent and challenge you, at the end of the day, they are representing you. The ideal Board in these situations are ones that will challenge you to a large extent but not try and derail the company and your role when things are not going as planned. This is a delicate balance and not easy to manage. It all comes down the people that you select and how you work with them on your Board. You, as CEO, are most likely going to be the ChairPerson and you have the role of managing the Board. It should be a straightforward task, but it is one that you need to do.

Use People you trust.

Your Board should be people you trust. People that you trust to tell you the truth and people that you trust to tell you when you are failing to make the grade. However, what you ideally want is people that are equally focused on you as well as the company. Without you as the leader, the company might not even succeed, so keep you focused, healthy and sane is equally a part of the job.

Keep it small and nimble.

There is a natural tendency to draw in lots of talent into a Board. Firstly, you are paying for them, so there is an element of cost being a driver to keep it small. Also, the driver is to remain nimble and quick. You want to be in a position where you can hold meetings quickly, schedule them on a dime and react quickly. The last thig you want to have to do is manage a schedule of 10 busy people. A Board meeting should be clear, concise, quick and very simple to manage if you have a good Board.

Check your rules for how it should operate and make decisions.

If you create a Board, work out with a charter what they are supposed to do and what they should be focused on. There is a need to establish the structure on which they operate. Make clear what is a board decision and what is a shareholder decision. It would be good to document this up and make sure it aligns to your articles or constitution. These may not be big issues now, but they will be when you get external equity and some members on the Board representing those interests.

Put in place insurance for the directors.

This goes without saying. It is hard to locate and sometimes expensive, but you should do it.