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Thursday, February 28, 2008

Construction your Board

Here are some thoughts on choosing board members.

Avoid "big names" For the most part, they are useless.
Select people who will attend each and every meeting, who will pay close attention to the business
Select people who have an affinity for your business, who understand your challenges and your opportunities
Avoid putting someone you can control on your board. In tough situations they will have a fiduciary duty to do what's right and you won't be able to control them when it matters most to you.
Don't let conflicts get in the way of selecting the ideal board member. Conflicts will be disclosed and can be managed. Many times the people who will understand your business best are conflicted in some way. There are ways to deal with this problem.
Make sure to have an experienced accountant/auditor on your board and have them run the audit committee. That is no place for amateurs.
Make sure to have at least two or three CEOs of comparable companies on your board. Make sure they are on the comp committee. Compensation issues are best handled by people who understand the talent market.
Select people who have the time to do the job right. Being a board member is a job. It's not a retirement perk. If someone cannot commit to attend each and every meeting and to spend at least several hours a week on your company, they are not the right choice.
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.
Above all else, look for great judgment and ethics.

picked up from Fred Wilson's thoughts on Board members..

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