Everything you need to know about board management.
Learn how to build a board, master best practices for working with board members, and unlock your board’s most valuable resources and expertise.
Every company has a board. But what exactly does a board do? And when should founders think about building one?
A board of directors (also called a board of trustees, board of governors, or just a board) is responsible for the high-level direction and oversight of a company.
They are primarily responsible for making sure leaders are considering their stakeholders’ interests in any and all business decisions.
Boards are also responsible for:
Establishing company-wide policies
Setting strategic goals and direction for the company
Ensuring companies have access to financial resources
Creating governing documents
Approving annual budgets
Authorizing compensation plans and stock option grants
Setting senior leadership’s compensation and benefits
Supporting the founder and CEO
The short answer is yes, every company needs to have a board.
You don’t need to build a big board—creating a board of one is completely okay. In fact, lots of startup boards consist of just the founder (or co-founders) until they receive outside funding. But there are advantages to bringing in outside expertise as you build and scale your company.
Your company is legally required to have a board the day you incorporate, but we recommend building your board sooner than you have to. The earlier you build your board, the faster you gain access to resources and expertise that can accelerate your business.
Many leaders think boards exist simply to monitor their performance. In reality, if you build your board thoughtfully and strategically, it can be your single most powerful asset.
Board members bring a wealth of expertise and experience to your company. You can leverage this expertise to strategically solve problems and confidently move your company forward. While leaders have to be hyper focused on the day-to-day operations of the company, board members can provide a much-needed outside perspective.
This is especially valuable for startup founders who are singlehandedly responsible for making product decisions, setting their company’s vision and strategy, and overcoming unforeseen roadblocks. Board members can help expand your resource pool and advise on areas where you may have less experience.
In addition, board members can connect you with their networks and connections, helping you gain faster access to financing opportunities and potential customers.