Is Your Board Strong? 5 Ways for Founders to Tell
As the fundraising landscape shifts from boom times to a more challenging environment, the pressure is ratcheting up on founders. This shift is happening on the heels of Covid-19, which strained the relationship between leaders and their teams, leaving CEOs and founders more isolated and employees feeling directionless or undervalued.
5 WAYS TO TELL YOUR BOARD COULD BE HEALTHIER
- You leave board meetings in a bad mood.
- You don’t feel you have any allies among the directors.
- Your board chair constantly agrees with you and never pushes back on anything.
- Your board looks and feels just as it did several funding rounds ago.
- You think there might be mutual trust and accountability among board members, but you aren’t 100 percent sure.
A year into the pandemic, more than one-third of founders rated their mental health as bad, while in a global study by King’s Business School, participants rated their life satisfaction an average 12 percent lower than before the pandemic.
These studies show that the greatest source of CEO stress is uncertainty. We have all been living with layers of uncertainty for more than two years now, enduring unpredictable changes to our lives and workplaces. Now, with venture capital wobbling in the uncertain economy, the stress is spiking again.
Amid these ups and downs, it’s critical for founders to have relationships that anchor them and people they can rely on for support and advice. This is why strong board relationships are a vital component of both a founder’s mental health and a startup’s success.
Strong board relationships are a vital component of a founder’s mental health and a startup’s success.
The right board members can offer insight, help make valuable connections to new partners, gut-check strategic decisions, provide a steady hand in times of crisis and share perspectives from their own founder journeys or from advising others.
At the same time, getting the most out of boards can be a challenge. Trust and transparency between CEOs and their boards is essential, but not always automatic, and it’s incredibly stressful when trust isn’t there. Establishing an open relationship is vital, because that’s when the value of a board really comes through.
Here are five questions to evaluate whether your board relationships are working for you, plus suggestions for building stronger ones that contribute to your startup’s success.
How Do You Feel After A Board Meeting?
One of the simplest metrics of board wellness is how efficiently meetings run, and how you feel afterwards. In the Agile Governance Platform’s governance assessment, they ask: Does engaging with this group leave you energized or drained? Does it lead to more questions or to actionable decisions?
It’s helpful to aim for evidence-based decisions when meeting with your board, grounded in your key performance indicators. Commit to sending your board documents a set number of days in advance and ask directors to review them before the meeting to avoid spending time on routine updates. Then hold yourself to meeting that timeframe. Set clear expectations on both sides.
Another good housekeeping practice for board meetings is an executive session. Usually, this takes about 15 minutes with just the CEO and the board, and then another few minutes with just the board. The time allows CEOs to give and receive more candid feedback, provide updates on the staff and have confidential or sensitive discussions.
Are Your Directors Your Allies?
When you select a board member, consider whether that person will be with you through good times and bad. Difficult times are inevitable when building a startup. Problems are going to arise and crises are going to emerge, and a board member should be someone you can call with any issue to talk things through, rather than someone you feel you have to hide sticky situations from.
The average tenure for directors on startup boards is three to four years, but experts say to assume you are embarking on a relationship that could last as long as 10 years. It’s a long-term commitment. With those directors you depend on the most, check in with them more often than the scheduled board meetings and set up regular one-on-one calls. Having regular, select meetings with key directors allows you to hear their unfiltered viewpoints outside the group context. Board members can bring a fresh set of eyes and hopefully a level head and work with you to address the immediate challenges and any longer-term implications.
Is Your Board Chair Effective?
During meetings, boards often spend too much time going over updates, and not enough time on what is most useful to CEOs: talking about strategy. Your board chair is your ally for keeping everyone on track. On early-stage boards, the chair does not need to be a subject matter expert in your business or technology. An invaluable role for the chair — as someone with the respect of your other investors and advisors — is steering the conversation.
When choosing your chair, a key qualification is having the time to dedicate to board service. You want someone to help you prep before the meetings, go through your deck, review the agenda and think through the right information to present knowing each of your board members’ focus areas.
You also want to pick a chair whose values closely align with your own. Humility and integrity are key traits. Look for someone who is supportive, on your side and not afraid to tell you when they don’t know all the answers but are also comfortable pushing back when their judgment diverges from yours.
Has Your Board Evolved With the Company?
In the early days of a startup, your first board can offer support in a dozen different ways, and often just help you figure out which end is up. The board at this stage is collegial rather than formal, meets on an ad hoc rather than a preset schedule, is often in crisis management mode and is comfortable with uncertainty and volatility.
As more institutional investors join the board in subsequent funding rounds, relationships will change. That’s as it should be. As the company becomes more complex, so will your job as CEO. You want the caliber of your board and the guidance it provides to keep pace.
It is never too early to consider bringing on independent board members. These are often people with deep domain experience in your sector or a skillset that complements the rest of the board. Independents bring a balanced voice and can serve as a conduit between you and the investors on your board. Placement firms can help find independents, suggesting advisors who offer outside perspective and sector-specific experience and guidance. They can also reach beyond your personal network and help provide candidates from a diversity of backgrounds.
Is There Mutual Trust and Accountability?
Your investors and advisors come to your board with preconceptions about the board dynamics. As a CEO, it benefits you to understand their expectations and working styles. Don’t hesitate to ask what has worked best on other boards, and what hasn’t. Learning how your board members prefer to communicate can save a lot of headaches.
Just as your board members will hold you accountable in your role as CEO, it’s perfectly acceptable to hold them accountable for any commitments they make. Many board members love to promise major connections (and other boons to growth) they can make for you, and don’t always follow through. You can respond by saying, “Thank you, can you make that intro in the next two weeks? What messaging or materials do you need from me? I’ll follow up.”
That trust, transparent expectations and mutual accountability should be constants for your board. If you make wellness a priority with your board, they will support your efforts with your team as well your business.