Gathering a board of directors to lead your company is no easy task—and it shouldn’t be. The board you choose will have a massive influence and impact on your company’s future, so being strategic about who you choose is essential for your business’s ongoing success.
We asked experts to share what to look for when selecting a board of directors, plus when to start the process, if you haven’t already. Read on for insights on how to get started.
Why being strategic with board selection matters
Needing to gather a board of directors usually means that your company is growing fast and moving in a great direction—congrats! But why is it important to be mindful with your selection?
From voting on company bylaws and approving the annual budget to having a say in succession planning and guiding your business’s direction, board members have significant power over your company. In fact, a board of directors collectively has more power than a CEO in most structures.
“Ultimately, a strategically assembled board isn’t just about governance—it’s a powerful catalyst driving the company’s growth, vision and long-term impact,” says Nicky Rishi, the founder of MissPoppins, a parenting support platform. “At MissPoppins, this carefully chosen team of advisers doesn’t just guide us through challenges—they actively help shape our future.”
You’ll need an effective, aligned board with a variety of skill sets to help your business overcome challenges, bring on positive change, and set and achieve goals. Carefully choosing members is the best way to ensure a well-rounded board.
“My belief is everyone should have outside advisers, whether they are board or advisory board,” says Therese Fauerbach, co-founder of The Northridge Group, a management consulting firm, and chair of its board. “An outside perspective is very important to leading with facts and observations that internal employees can’t see.
“When a company has a problem,” she adds, “it is the board’s responsibility to stand in and help run the company, especially if the CEO is gone.”
When to start looking for a board of directors
New startups should typically start forming a board of directors when they get their first outside investors.
“For early-stage companies, the most common reason to assemble a board of directors is upon the first qualified financing, where a company takes on outside capital and professional investors end up owning a large percentage of preferred stock,” says Coco Meers, the co-founder and CEO of Equilibria, a women’s wellness company.
“Investors, or representatives of their choosing, often require the right to weigh in on major company decisions like subsequent financing rounds, M&A prospects, additional executive hiring, annual budget approval and much more,” she adds.
What to look for when selecting a board of directors
If you’re looking to form a board of directors, it’s likely you already have a few candidates in mind. But before reaching out to your top prospects, consider these factors first:
Complementary skills and diverse perspectives
The first thing to consider when forming a board is what skills and expertise your company needs to succeed.
“Keep a constant list of skills the company needs expertise in and look for board members who can fill those gaps and help with the overall strategy,” Fauerbach says. “Not everyone will be the right fit at the right time, so use measured needs to decide on which candidates you select first.”
You can then use that list of skills to gather candidates who could fill those gaps—but keep in mind that you’ll want to create a list of candidates for each area of expertise.
“I’ve learned that selecting board members involves looking far beyond impressive resumes. It’s about bringing together people who offer complementary skills—whether deep industry expertise, strategic insight, financial acumen or ethical leadership,” Rishi says.
Meers adds that “whether your board was hand-picked or handed to you, it is essential that directors bring a diverse range of cross-functional perspectives.”
Mission alignment
If the candidate doesn’t align with your company’s mission and values, you’ll likely have ongoing problems with them down the line. Choosing board members who not only align with your mission but are also passionate about it will help you create an engaged board that’s dedicated to helping your company grow.
“Selecting a board of directors isn’t just about filling seats,” Rishi says. “It’s about thoughtfully assembling a team whose diverse perspectives, expertise and values align authentically with your company’s vision and mission.”
To ensure that your candidate aligns with your company’s mission, ask interview questions like these:
- What interests you about our mission?
- Do you have any experience that reflects our company’s mission?
- Why do you want to serve on our board?
“Equally important is finding individuals who approach collaboration with humility and openness,” Rishi advises. “In practice, that means actively seeking board members who don’t just advise but [also] partner genuinely to move the vision forward.”
Bandwidth and conflicts of interest
While your candidate may be the perfect person to join your board, if they don’t have the bandwidth to be an active member, it may be best to take a pass on them—at least for now.
“The first thing I ask for on a board search is the board calendar,” Fauerbach says. “Some folks are ’overboarded,’ and others have conflicts that prevent them from really helping the company. You always want no conflicts, if at all possible.”
Additionally, be wary of any conflicts of interest before asking someone to join your board. For example, if a board member also has a vested interest in a competing company, they could make biased decisions in your company that favor the other one.
To avoid conflicts of interest, be thorough when interviewing candidates so you can get a deep understanding of their backgrounds and current affiliations. “Clear expectations, transparency and a shared commitment to the company’s core values ensure that the board remains effective and aligned,” Rishi says.
The bottom line: Keep putting in the work
Once your board is established, pat yourself on the back (whew, that was hard!)—but also remember that the work isn’t done. A successful business will always have succession planning in mind, whether that’s for the board of directors or leadership positions within the organization.
“You should treat your succession planning of a board like any internal succession plan,” Fauerbach advises. “You should always be building a pipeline of candidates because you never know when you need one.”
According to Meers, forming healthy, strong relationships with your board members is paramount. That way, when challenging times come, your board has your company’s back and can work together to create solutions.
“Meet often, connect authentically and don’t be afraid to be very direct about specific ways your directors can support you,” she adds. “They purposefully are not in the day-to-day—and they’re not mind readers.”
Photo from Ground Picture/Shutterstock.com
