Startup Boards for CEOs Series: Post 6 of 10
Recruiting and interviewing candidates to join your board as an independent director is time consuming and there really aren’t any shortcuts or workarounds – and you CANNOT delegate to your head of HR, your executive recruiter, or anyone else. It’s an important process to get right and is worth every minute you put into it because building a board can be one of a CEO’s greatest trump cards. One way to get started is the old fashioned cold call. Without being even a little bit disingenuous, you can use the “I’m the CEO and would like to talk to you about a potential board seat with my company” as an entrée to meet face to face with just about anybody. I’ve met some of the most interesting, senior, brand-name people in my industry with this candid approach. Turns out, flattery will occasionally get you somewhere! Use this card wisely and sparingly, and always be prepared to follow up on your meetings. The cold-call approach works and it’s one way that you can take full advantage of networks. You never know what opportunities you’ll uncover along the way and sometimes if the person you contact says “no,” they’ll follow-up with some suggestions of others who might be interested in your board.
Your board can be one of your secret weapons, but only if you’re intentional about recruiting, methodical in how you go about it, and vigorous in removing people who don’t fit, preferably before you put them on your board. Creating a great board starts with finding the best people you can, and here’s the formula I used to get the best people to join my board.
- Take the process seriously. Devote as much focus to building your board as to building your executive team both in the effort you put in and in thinking through the overall composition of the board. It’s easy to get side-tracked and focus on one person, but the value of the board is more than one person–it’s the collective group, their culture, and their engagement that matters the most.
- Source broadly. First, of course, you should use Bolster to find independent board members since that’s what we do! We work hard to build a well-qualified, well-profiled, and diverse candidate pool. We are sourcing talent very broadly. But we’re not the only ones and there are other great sources for board members out there as well like HimForHer, the BoardList, and AboveBoard (not to mention communities of executives like Valence, The Mom Project, and The Alumni Society, to name only a few). We partner with all these platforms on board searches from time to time. Outside of these new platforms, you’ll need to get a lot of referrals from disparate sources, and I mean lots of referrals from lots of different people. Aspire to reach people who you think may be beyond your reach–reach really high. Remember, asking someone to join your board is a pretty big honor for them, so that ask becomes a good calling card for you. I’ve had meetings with some amazing CEOs over the years when I’ve initiated a cold call around the person being a potential board member. Not all have worked out but almost all of them took the meeting. It never hurts to ask!
- Interview many people–and by “interview” I mean have a thoughtful, candid conversation. Your potential board member is not applying for a job and you shouldn’t treat them like a job applicant. I never delegate this task to anyone else in the organization. If you can (tough in a pandemic world), conduct your conversations in-person and have multiple conversations with your finalists. It’s also a good idea, once you whittle down the list to a few people, to have all of your existing board members meet potential board members and have their own conversations. I’d also have every finalist meet with at least one member of your leadership team, or a few at once.
- Check references. You don’t want any surprises and although checking references is tedious and oftentimes disruptive for high-power people, check anyway. You should learn about your potential board members from multiple sources and within different contexts. See more on this below.
- Have finalists audition by attending a board meeting, but don’t just invite them to show up, give them some extra time to read materials, and offer your time to answer questions before the meeting. You can even offer to do a one-on-one meeting in person to prepare them and answer any questions or concerns. There’s no better way to understand how a person will fit into your board, contribute, and add their perspective than having them attend a meeting. You will get a good first-hand sense of a lot of the preceding top four items this way. You want to see a prospective board member dive into the flow of a conversation in a meeting even if they don’t know a ton about the material. Someone who is deferential or afraid of saying something dumb or making waves, even during an audition like this, is likely to behave that way once on the board as well. I had one “sure thing” board candidate attend a board meeting in this way, and he completely fell flat. I was disappointed – but was I glad I had seen him in action before giving him an option grant and a four-year term!
- Have no fear yourself of rejecting potential board members. Yes, even if you like them, even if they are a stretch and are someone you consider to be a business hero or mentor, you can reject them. You can also “fire” a person from the board even after you have already put them on the board. This is your inner circle. These are the people you’ll confide in. These are the people whose opinions and insights will impact your entire company. These are the people who will tell you when you’re wrong, when you’ve got a boneheaded idea, when you need to develop more skills. Do not take this lightly. Getting this group right is one of the most important things you can do for your company.
- Finally, give the most gracious “dings” of your career when you tell the unsuccessful candidates that you’re going with someone else. These are influencers, senior people, thought leaders, heavy hitters. You want them to feel good about the interaction with you and to speak well about you and your company to others, to open doors for you and hopefully be an ally and part of your network. My personal formula is that everyone I interviewed for the seat gets a bottle of wine and a handwritten note. Yours could be different of course, but you want to shoot for a “blow them away” rejection.
You may think that the advice I’ve given only applies to independent directors, but I strongly urge CEOs to go through the same process for vetting a future venture investor who will have a board seat. In some ways, it’s even more critical to conduct a rigorous process for a VC. It’s often much harder to remove a poor performing venture director from your board; not so hard to remove an independent director. Besides, the best venture capitalists have nothing to hide and they’ll ask you to check their references, provide you (sometimes) with a list of all the CEOs they have ever worked with, and give you an open invitation to call anyone on the list. If a prospective venture investor doesn’t provide you with a list of the people they work with, ask for it. If they refuse, that’s a huge red flag.
Brad Feld and Mahendra Ramsinghani have great advice on interviewing and checking references of board candidates in Startup Boards:
Like any executive recruiting processes, the dance can be complicated. Assume that your prospective board member will want to meet members of the management team, other board members, and do her own diligence on your company. You should use this time to do your diligence on your prospective board member. In addition to talking to CEOs from other boards she has, or is, serving on, try to ascertain whether your prospective board member has enough time for you and your company. Does she have the characteristics and skills you thought she had? Will she fit culturally with the rest of your board? Examples of questions beyond typical reference checks include:
- Describe a few tangible examples of how the board member can add value to a startup?
- How did this board member respond to a challenging situation, such as running out of cash, or a down round?
- In the context of the board, what are some shortcomings of this person?
Try to keep these questions open-ended. Give the reference a chance to talk and, when you hear something interesting, nudge them along the path for more information. Remember, this isn’t a check-the-box exercise; rather, you are looking for detailed information about the person you are considering asking to join a critical part of your team.
Brad and Mahendra go on to produce this great table that I refer to when I’m interviewing board candidates around what “great” looks like in various functional competencies directors bring to a board:
The team dynamic is also critical to keep in mind when you’re adding a board member. In Fred Wilson’s post about choosing board members, he makes this point:
Select people who will get along with each other. The very best boards I am on are friendly social active groups. Serious business doesn’t have to be stilted and formal. It can and should be fun.
You might be tempted to interpret Fred’s point as, “hire someone you’d want to have a beer with,” which is actually bad advice when you want to create a diverse board. I don’t interpret it that way but I do think it’s important to be inclusive in everything, and that’s a sure way to help people get along with each other and to help create friendly, social active groups. I’d build on Fred’s advice a bit, too. When you think about interviewing director candidates, remember that your board is a TEAM, and you need to build, curate, and manage it as such. So one of the most important things to think about when you’re hiring a director is what the board culture and board dynamics are. This may be the same as your company culture and leadership team dynamics, but my guess is that it’s a bit different - and possibly something you’ve never written down or articulated to yourself before. If your board is full of people who are loud and boisterous, be wary of a candidate who is a shrinking violet unless you think you can draw that person out in a meeting setting. If your board engages in a lot of productive conflict, be wary of ego-laden candidates who talk over other people and aren’t great listeners. If you like your board to connect directly with senior executives on a regular basis, be wary of overly formal or hierarchical or political candidates who might scare off your management team.
Finally, when selling a candidate on joining your board, above all else, be honest about yourself and about your company and where both need help. There are no secrets in a board and surprises will nearly always set you back, tarnish your credibility, and make it more difficult to create a vibrant board that makes a big impact in your company’s performance. Much better to tell the incoming director “we need help with product-market fit” or “I need to work on my own written communication skills” than to have the director show up on the other side of the recruiting process surprised at things like that!
-Matt Blumberg, May 11, 2021
