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.
Your board will be involved in every important decision you make for your company, so choosing the right people for your board is critical.
When you’re building a board, it’s important to consider individual expertise and characteristics, as well as larger group structure and dynamics. board
Generally speaking, there are three types of board members to account for:
Management: founders, founders, CEOs, or other leadership team members
Investors: VCs or anyone else who has invested in your company
Independents: people who aren’t investors or leaders at your company
The goal is to create a balanced board, so each of these three groups should be evenly represented. For example, on a three-person board, you would ideally have one founder, one investor, and one independent board member.
Individual characteristics can make or break the effectiveness of a board, and it’s important to critically evaluate each potential board member’s personality. The best board members tend to share a few traits:
Organized: your board members should be able to keep track of information, follow up on conversations, and close the loop on any outstanding issues.
Punctual: in addition to showing up on time for meetings, your board members should be fully present and focused any time you’re working with them.
Engaged: simply showing up to meetings isn’t enough—your board members should be fully engaged in conversations during meetings and respond promptly to day-to-day messages and requests.
Honest: the best board members aren’t afraid to speak their minds, especially when they have a dissenting opinion.
Resilient: there are many ups and downs to running a company, and you need your board to continuously show up and stay committed through any unforeseen challenges.
Keep an eye out for these traits (or their opposites) when you reach out to prospective board members. If someone is slow to respond to your emails, distracted during meetings, or unprepared for conversations, it’s a red flag. Take your time and do your due diligence.
Find people who fill gaps in your team’s knowledge and experience. Start by reflecting on your strengths and weakness (both as an individual and as a team). Then look for prospective board members who complement your skill set. If you have a product design or engineering background, consider board members who have a strong financial background or go-to-market experience.
Many different types of previous experiences can be assets. Someone who has experience building their own business can understand the challenges of entrepreneurship, while someone with past experience serving on a board can help you successfully build and manage a board of your own. You can even look for board members who have practical experience in specific areas you’re looking to grow (like sales or hiring).
You can have both board members and board observers on your board, but there are important differences to understand about each role:
Most of the people on your board will simply be board members or directors. Each board member’s responsibilities are the same—providing ethical, financial, and legal guidance to move the company forward in a responsible and strategic way.
Board observers can attend and participate in certain portions of board meetings, but they don’t have formal board roles or responsibilities. They can’t vote on board issues or attend executive or closed board sessions. Most often, board observer seats are given to VCs who want to be involved in board functions. This allows leaders to satisfy their VC’s requests without giving vital board seats to too many investors or growing their board to an unmanageable size.
Every board has to have a board chair—the person responsible for keeping the board and its activities on track. Board chairs facilitate board meetings, set objectives for the board, and serve as the main point of contact for other board members. The majority of companies (75%) choose to make their founder/CEO their board chair. However, more and more companies are opting to keep these roles separate to create better governance practices (this approach is particularly common among nonprofits).
You don’t need to give your legal counsel a board seat, but you should include them in all of your board activities. A knowledgeable lawyer who understands your business is a powerful addition to your company and can help ensure that important legal considerations are included in all board activities.
There is no right or wrong size for a board. The important thing is to build a board that functions effectively, regardless of size.
However, there are a few general guidelines to help inform the size of your board, based on the stage and complexity of your company.
Startups (pre-Series A): aim for 1-3 board members (a board consisting of just the founder is completely okay in the early days of your company)
Series A or Series B: most companies have 3-5 board members at this stage
Growth stage companies: 5-9 board members will give you a good range of knowledge and experience
Most boards have an odd number of members, which helps avoid tie votes. But ultimately, the size of the board will not dictate how successfully your board works together. Small boards can be extremely impactful. And healthy even-numbered boards can easily avoid tie votes. What matters most is thoughtfully building and managing your board from day one.
Your board can be your most valuable asset, so it’s important to dedicate time and attention to screening, interviewing, and selecting board members.
Start by writing a description of the type of person you're looking for. Consider the experience, expertise, and attributes that would be beneficial to you and your company. The goal is to get a clear idea of the role you're trying to fill.
Once you know what you're looking for, reach out to people you know for potential connections. Ask your investors, other founders, industry advisors, or any other people in your network for recommendations.
Don't limit your search to people you already know; ask people in your network to suggest other names. Bringing diverse perspectives to your company will help you avoid groupthink, tackle problems from new directions, and predict challenges you might otherwise miss.
Once you have a list of names, start reaching out. It helps to ask for an introduction, but if you don't have mutual connections, you can always send an email or make a call directly. Keep your request clear and to the point; for example, "I'm the CEO of Company Name and I'd like to talk to you about a potential board seat with my company."
Schedule interviews with each of the board member candidates. Unlike a job interview, your candidates haven’t applied for a role on your board, so think of these interviews as an opportunity for you to evaluate each other. Help them understand your vision for the company and the board, but be honest about where you need help. Candid conversation at this stage is the best way to gauge if someone is a good fit.
Take your time! This is one of the most important decisions you’ll make in building your company. If you’re on the fence, it’s okay to keep looking. If someone isn’t a good fit, don’t be afraid to say no. Just be sure to communicate your decision respectfully and professionally. You want any candidate to think and speak highly of you and your company, whether or not you end up working together.