Lessons on Managing your Board of Directors – Tips from a VC
Dealing with your board of directors can be an unexpected task for a startup CEO. In our two-part blog series, we made the arduous task of board meeting prep manageable– from agenda setting in Part 1, to what goes in your BOD deck and when it should go out to your board in Part 2. To supplement our board tips, we reached out to North Coast Ventures for firsthand tips for new founders.
Lesson 1: You need an Independent Board Member
You want an excellent working dynamic with your board of directors. Still, differences in opinion can sometimes be sticky to resolve, and you certainly don’t want these issues affecting your company’s stability. This is where the need for an Independent Board Director comes in. This board member does not (and cannot) hold a management position within the company and is also not a former executive. Their independence in this role is essential to maintain a healthy board and provide critical fairness in opinions. Having an external stakeholder can offer valuable and unbiased insight into the company, so treasure this person’s role and perspective on all areas, especially divisive ones. Their deep expertise in your industry is crucial in resolving disputes, understanding best practices, and ensuring sound operations.
Lesson 2: Don’t underestimate the power of personal relationships with your board members
While remote meetings have become a standard for companies during the last two years of the pandemic, it’s undeniable that in-person meetings add a lot to building a dynamic of trust and teamwork with your board of directors. If you’re still working remotely and hosting video conference board meetings exclusively, try to get creative in ways that build connections with your board.
Consider setting up in-person one-on-ones with your board members between board sessions. If at all possible to travel to them to enable this, it can add significant value. Find out-of-the-box ways to build memorable connections if that’s not an option. Sending a box of goodies or even sending a favorite local meal from Goldbelly for all board members to enjoy is a memorable way to give the feeling of a shared meal.
Similar to how forging meaningful relationships with your internal team helps things run smoothly, applying the same principles with your board is essential.
It’s vital to establish this trust before an inevitable crisis occurs. With this base of solid connections in place, you will find it easier to nurture an authentic team spirit that knits external board members closer to your vision. We previously wrote an in-depth guide on discussing financials with your board of directors, which includes best communication practices to build your credibility and enhance your relationships.
Being a founder can be a lonely and sometimes overwhelming position, but it doesn’t need to be! Surround yourself with great minds— with your core team members and your board of directors— and nurture these relationships to navigate the challenges ahead. Your board should be your first stop for strategic direction, so don’t hesitate to keep them updated between meetings. With effort, relationship-building, and continuous ongoing communication, you’ll develop a united group of advisors that can help you steer toward success.
Our huge thanks to North Coast Ventures for their insights that provide founders a behind-the-scene look on board reporting! After all, a solid relationship goes beyond just the deck you present.
Based in Cleveland, North Coast Ventures is a capital partner that invests primarily in early-stage, business-to-business (B2B), and Software-as-a-Service (SaaS) companies. Apart from capital from their Seed Fund, North Coast’s portfolio of companies is given access to over 400 members, including investors, entrepreneurs, and business leaders dedicated to helping launch early-stage ventures.