5 Things to Know When Selecting Board Members
Selecting board members either for the first time or to replace/add to your board is an exciting time. This is mostly because of the unknown which also makes it a really challenging task to do. The board is really the governing body for your company and the other stakeholders. Stakeholders include ownership of course but also:
Done correctly assembling a board that has it’s collective focus on building strategic value for the company while always trying to satisfy the stakeholders is a challenge.
The key is to finding those board members that can do that. Here are some points to keep in mind:
- Try and only hire people you do not already know. This is important because they will give objective advice since they do not already have a relationship with the company or individuals.
- Find people who are both collaborative but have very strong ideas/experience and willing to get into the discussion and debate at the board level. The last thing you want is a person with great experience that is unwilling to speak up or share their knowledge with the bigger group.
- Identify the primary need on the board the person being recruited needs to bring (executive, distribution, operations, finance, industry contacts, corporate development, family business, etc.) and aim to hire individuals that bring more than one value to the company.
- Always try to do at least 2x in revenue. If your company is $50M then look for people that have experience with a company that does $100M or more. They have been where you are hopefully going and can help build the bridge to your next horizon.
- Seek diversity. Look at your employees and customers and suppliers. Build your board out that better represents those stakeholders in age, gender, geographical location, etc.
What is exciting is when you get it right and the new board member starts adding value in the first board meeting they attend.