Building and nurturing a healthy board relationship
As CEO, there are not one but two organizations you need to lead: your company and your board.
Creating and maintaining a positive board relationship is a discipline in itself and one that needs to be taken very seriously.
Ultimately, these are the people who essentially will make or break your company; they will be with you… or against you.
Working with your board is not about making PowerPoints and showing up and getting rubber stamps on plans.
Rather, you need to develop a healthy tension where the board supports you and your management team while maintaining objectivity, independence, and even a dose of skepticism.
Sometimes we inherit a board and other times we’re fortunate enough to select our own board of directors.
If the latter, the choices you make are among the most crucial you’ll face as a leader.
You need a clear understanding of who potential candidates are and what motivates them, so you can intelligently say yes or no to the right mix of board members.
A lot of founders add board members for the wrong reasons. Perhaps they were on your advisory board (which is verydifferent!), or you worked together at another company, or someone you know has a personal relationship with someone.
The reality is that you need to interrogate your board as deeply as you do your leadership team. Here are five factors you should consider:
- Expertise and skills: Board members should possess a diverse set of skills and expertise relevant to the organization's mission and goals. This might include financial acumen, industry knowledge, legal expertise, strategic planning skills, marketing experience, etc.
- Reputation and integrity: Members should have a solid reputation in their respective fields and demonstrate high ethical standards and integrity. Their actions and decisions can significantly impact the organization's reputation and credibility.
- Diversity: You want heterogeneity in terms of backgrounds, experiences, perspectives, and demographics. All of these are crucial for fostering innovation, creativity, and effective decision-making within the boardroom.
- Commitment and availability: Board members should be committed to actively participating in board meetings, committees, and other organizational activities. They should have the time and availability to fulfill their responsibilities effectively.
- Strategic vision and leadership: Effective board members should be able to contribute to the development and execution of the organization's strategic vision. They should possess strong leadership qualities and the ability to inspire and motivate others.
Once you have your board in place, there are three things that are essential when working with them: transparency, transparency.. and transparency.
Nothing has brought down more CEOs than lack of candor with their boards. When you’re the CEO - especially when you were also the founder of the company - it’s easy to get caught in the trap of thinking: “This is my company.”
That’s only partially true. Even if you were employee number one in your garage, your board has the power to make your life very difficult, and even show you the door.
Here’s the way I would communicate bad news to my boards. First, I would call each board member individually and let them know we were facing this particular challenge and detail how it could negatively impact our business. I’d let them know that I was calling all the other board members as well.
The purpose of these calls is not to try and solve the problem, but rather lay the foundation for the board to work together as a team. I would then write up the issue into the materials in preparation for the next board meeting. I’d also include my suggested remediation as well.
With all of that, the board meeting can be incredibly productive and collaborative because the members know I’ve been open with them and have had time to think about how to solve the issue.
And we solve the challenge at hand and move on with building a successful company.
Thanks and have a great week,
Peter
