Startup Boards for CXO’s Series: Post 8 of 11
A board role differs from other roles in business and no matter how accomplished you are in your professional career, being a “great” board member is not just a continuation of what worked for you before. I’m writing this blog post because I believe that a board of directors, especially for a startup, can be an incredibly powerful and impactful tool, but the effectiveness of the board depends on the board members. So I wanted to provide my thoughts on what makes a great board member, which I think will be helpful to first-time and seasoned board members alike.
I’ve had a board of directors since the beginning of Return Path over 20 years ago and have also served on about 10 other boards of different kinds so in total have seen hundreds of board members. That’s not as many as a VC, but it’s a decent sample. I have seen the good, bad, and ugly when it comes to board members. One of the big differences between a board position and other positions is the infrequency of meetings and with just a handful of opportunities to meet as a board and make your contribution, it’s best to hit the ground running.
And while every board differs (because every company differs, every CEO differs and every situation differs) there are still some things you can and should do as a board member that are consistent, regardless of the situation you’re in.
Here are some tips on how to be a great board member:
Be prepared. This means more than glancing at the materials moments before the meeting starts, for starters. You might only get the materials a few moments before the board meeting starts, but if that’s the case then I’d suggest you propose a “reading period” at the start of the meeting for everyone. It’s a lot better to spend 15 minutes reading the materials–even if it cuts in to “board time”–and have a meaningful conversation rather than to go into a meeting blindly without any preparation. But if you get materials a few days ahead of time, there’s no excuse for not reading them thoroughly, taking notes, and jotting down questions you’ll want to ask in the meeting. Even better – share those questions with the CEO ahead of time.
Practice good meeting hygiene. This should be an easy one, but everyone is busy. A great board member attends all meetings, they show up on time and don’t leave early. They don’t multitask during the meeting by texting or working on their phone. They are fully present at all times. If they can’t be (life does interrupt sometimes), they ask to be excused and leave the table until they can return and be fully present.
Have a point of view and speak your mind. Yes, it’s tough and sometimes uncomfortable to be a contrarian or to raise thorny issues, but that’s one of the best things that a board member can do. (Note: I have an upcoming post on “how to make your voice heard”–and I don’t mean speak louder!) One of the mental frameworks that will help you speak your mind is to know that your role on the board is to represent the interests of the company, and there are a lot of people you are representing. Almost all of them are absent from board meetings. So your role is to speak up for those who can’t speak for themselves. I’ve been in situations where there are issues with other board members and those are addressed in the board meeting. I also once had a board member tell me that I could be better at firing executives more quickly–and there were executives in the meeting at the time!
The best board members are fearless in speaking their mind. They’ll bring up tough and uncomfortable (and personal) topics and they won’t work backroom deals or tell you “what they really think” outside of the meeting.
Don’t speak to hear the sound of your own voice. Not every director needs to weigh in on every discussion. If you don’t have something to add to a particular conversation, either don’t speak or simply say “I agree with what’s been said,” or “I agree with what Sally said.”
Vary your input. I have had several board members over the years who had amazing advice in their first meeting or two…and then continued to repeat the same advice and the same stories in every subsequent meeting. You didn’t get on a board by only carrying around a hammer, so make sure you occasionally use your wrench, screwdriver, level, and tape measure.
Hold the CEO accountable. This may sound silly – of course boards should hold CEOs accountable – but it’s easy for first time directors to fall into the trap of being afraid to do that part of the job. The really great board members ask consistently about hard / important things, and as a CEO, I can tell you that it’s great to know my board is paying attention and challenging me!
Connect with the CEO outside of the boardroom. Board members are more effective when they have ongoing relationships with CEOs outside of meetings. Whether semi-regular email exchanges, periodic calls, or the occasional meal or coffee/drink, make an effort to spend time getting to know your CEO as a person – just as you’d want someone who is your “manager” to do with you.
Build independent relationships. You may come into a board role not knowing anyone but you should work to change that dynamic immediately. The board is a team like any other team and it works best if board members know each other and know others at the company. You want a board that has high levels of trust so that they’ll be candid and transparent. Board members should work well together and a good way to do that is to encourage them to interact, socialize, and seek each other’s advice. A great board member takes the initiative in building relationships and they do that without any prodding from the CEO.
Leverage your network, always be recruiting. Some people seem to be naturally inclined to create open networks, to look for ways that they can introduce people who can help each other. If you’re not naturally inclined to do that you’ll have to learn to become more so because one of the best parts of being a board member is being able to connect people and resources to your company. This could be as simple as providing the name of your lawyer, or some other professional that could be helpful in a situation, but it could also mean being creative with the resources that you have, and it definitely includes always being on the lookout for other great people to join the company, so welcome to being a part-time recruiter! A great board member will be looking at every situation through the lens of, “who do I know that can help us?”
Look at situations strategically. You don’t need an MBA to be able to help a company think strategically, but you do have to invest some time learning about the drivers of the company, their strengths and weaknesses, and the industry dynamics. To make an impact a great board member will have a deep understanding of the economics, competition, ecosystem, customers, and core values, and they’ll know how all of those work together in the business model.
Be operationally aware. Related to thinking strategically is the idea of being operationally aware. Usually operational issues are highly context-dependent, and a great board member will work to have significant understanding of a functional area, engage with the leader of that function, and develop a solid awareness of the day-to-day activities. This is one area where independent directors often outperform investor directors, who often focus on high-level pattern matching since they sit on numerous boards, and don’t always have depth of operational experience.
Think outside the box. Good board members are able to understand all the pieces on the chess table; great board members are able to go a step further and pattern match to other situations and environments and provide advice, history, context, and anticipated consequences of actions. A great board member will be able to see the proverbial forest for the trees, which can be an enormous benefit to CEOs focused on the minutia of the day-to-day. As a CEO, a lot of the time you’ve never seen something before or you just can’t see what’s happening. It reminds me of the game where the name of a famous person is placed on your forehead–like George Washington, or Ruth Bader Ginsberg, or Oprah–and then you have to ask questions of others to get clues to solve your personal riddle. When you finally guess it, it’s like “Oh, of course.” Same thing with a business: once things become clear it’s easy to take appropriate action, but getting that clarity is tough on your own. A great board member brings that critical “outside the box thinking” to their role.
My friend Heidi Roizen wrote a blog post on building a diverse Board of Directors, which I think ought to be a top priority for every startup company. She outlined some ideas for board members to follow and although some of the ideas double up with mine, they’re worth emphasizing anyway.
Understand your legal responsibility. Yes, unlike most other roles in a company a board member has legal responsibilities and in a nutshell they involve acting in the best interests of the shareholders at all times–even if it poses a conflict of interest for you or favoritism to your business or associates. Make sure you read the specific post here on corporate governance for more details on this.
Know who you serve. You serve the shareholders, right? Not the CEO, Chair of the board, or other directors. But who directors serve is evolving and expanding and now (can) include things like the environment, social responsibility, customers, employees, vendors, channel partners and others in the ecosystem. All of these constituencies could impact shareholder value, but they’re not always in alignment, so the role of the board member is challenging. While this is also covered in the prior post on governance, the best way to think about this is that you serve the business, not any one stakeholder. At any given fork in the road, what is in the best overall interests of the business?
Be an independent thinker. Don’t rely on the CEO or other board members, form your own opinions…independently.
No surprises. How much do you like surprises at work? Not very much. Neither does the CEO/Chairman of the board you’re serving on. If you have a strong negative reaction to business results, if you are particularly skeptical about a path the company is going down, if you are deeply concerned about the performance of an executive on the management team – speak up early, ideally ahead of a meeting, so no one is surprised by what you have to say.
Understand the board dynamic and what role you play. Boards are teams, and teams have different kinds of teammates on them. If you are the quiet one on the board, make sure you save up your input until you have something high impact to say, then say it – your words will mean as much as if you’d spoken 10x the number of them. If you are the financial hawk on the board, make sure you’re looking at every decision through that lens and giving that kind of input, since no one else will. If you’re the only marketing professional on the board, make sure you are thinking about the impact of decisions on the company’s brand and funnel. You get the idea.
Remember that it’s not your job to solve the company’s problems. It’s the management team’s job. It’s your job to hold them accountable and to provide ideas. As my Bolster colleague Bethany Crystal blogged a couple of years ago in What does it mean to be on a Board? it can be tough to resist fixing a problem that you know how to fix.
It’s quite common for the highest performing individual contributor (IC) to get promoted to manager but this doesn’t mean they will “crush it” the same way. How could they? The skillsets are completely different. As an IC, you derive all of your satisfaction and energy around getting things done yourself. As a manager (and I’d add as a director), you relish in the collective success and output of the team around you.
It’s not a switch you can flip overnight. Morphing from “high personal output” mode to “high team output” mode is a slow and (often painful) process. There are dark periods where you might wonder, “Why am I here? How am I motivated? Why did I say yes to this? What am I supposed to do? Why can’t I just do it all myself?”
This is a little bit about how I’ve felt in the first couple of board meetings: “What am I supposed to care about? What’s the thing I can do that offers the biggest impact? How can I show my value? Why am I in the room at all?”
I’m trying to fight the urge to “jump in and do something” whenever I hear a problem. Truly, this is difficult for me. Sometimes I feel like I need to handcuff myself to the table just to stop myself from raising my hand to volunteer for something.
A great board member will resist the temptation to get in there and “fix” things, they will resist telling the CEO what to do. Great board members offer context and advice, they don’t dictate solutions.
If I had to sum up all of this advice into one line – it would be this: be a team player. Again, boards are teams, and teams are high functioning when their members have a high degree of trust, cooperation, and alignment. If the team needs something from you, you need to make sure you deliver it.
-Matt Blumberg, June 1, 2021.
