CEOs: Six Steps to a High-Performance Board Team

Your Board as a Team

Founder/CEOs: if you want a high-value Board of Directors (and you should), you need to approach as a team sport.

Almost every experienced Board Member (both Founders and VCs) agree on this; they also agree it rarely happens.

As Founder/CEO building a better Board doesn’t have to be your job - there’s no law that mandates it.

However, it’s certainly in your best interest - both for the success of the Company and your success as a leader.

Master the six elements below (in whatever way works for you + your Board), and you will probably have a Top 1% Board - and that can be a huge competative advantage in a world where every bit of edge counts.

The Six Attributes of Highly Effective Teams

Like any team, a high-performing “Board Team” will have six common attributes:

Strong alignement on a shared objective
Relevant and diverse talents / skills / experiences / perspectives
Clear understanding of Individual and Group roles & responsibilities
Shared committment to each other and the team’s ultimate success
Productive and efficient process for doing the work
Motivation for constant improvement

When Boards work, it’s because these six dimensions are working.

But if any one goes red, your Board quickly transforms from “Team” to “Congressional Committee.” And nobody likes that.

Playing & Winning on Hard Mode

Boards by their nature are not natural teams.

The “team members” meet infrequently, have different personal and economic incentives, get information infrequently, don’t have a strong default-pattern for work, and typically do nothing for self-improvement.

If you ran an executive team this way, you’d be in trouble.

So let’s get specific about the challenges - and some tactics to consider - on each topic:

1. Objective Alignment

Board members can easily develop competing definitions of the ultimate objective or purpose of the Company.

The reasons for this range from inoccuous (objective was never stated) to insidious (Board member has a conflict of interest external to the company).

But usually it’s because most/all directors have a beneficial interest in different classes of shares - or different strike prices - and in the absence of a higher-calling, that becomes the thing they focus on.

You can test this at your next BOD meeting by asking every Board member write down the 1-sentence description of what they thing the Company Objective is.

If you have >1 unique response, then you’re not in full alignment.

That’s not necessarily a bad thing; it just means you need to get back to alignment before you can make any substantive decisions.

Tactics to Consider:

Start every Board meeting / presentation / document with your 1-sentence statement of the Company Mission or Purpose
Check with some frequency if Board members can recall the same statement (harder than it seems!)
Refer to the statement as the “cornerstone” when making all major decisions; repeat practice is the best thing you can do!
Avoid a “Vacuum” at all costs; it’s far better to have a statement of purpose you don’t love than none at all

2. Diverse Talents

Most Startup Boards are likely short on the requisite talent and perspectives you’d want on a strong team.

A 2021 study of Startup Boards by Bolster (n=250) revealed that two-thirds of those companies had ZERO Independent Directors.

That of course means only having VC and Founder directors around the table. Having served and seen a wide range of Startup Boards, it’s safe to say this is very common. And it’s an unforced error.

Tactics to Consider:

Make a “Board Matrix” with your current Board + Management team of the skills and perspectives you’re missing AND would help the company advance its mission
Task all Board and management team with sourcing [3] potential names to fill those spots
Get one of those spots filled
If you need help, call Bolster (https://bolster.com)

3. Roles & Responsibilities

Most Board members have a general sense of their responsibilities. But this is highly variable across Board members and contexts.

Like the common objective (#1), try asking your Board members (or any Board members) to describe their responsibilities. You’ll get a unique answer almost every time.

But if you leave it to chance, the most likely outcome will devolve to “read the deck the night before, and show up for the call.” It won’t be true in every case, but when it becomes a TechCrunch article you know it’s a problem.

Tactics to Consider:

On a single sheet of paper, write down the Group and Individual expectations for each Board Member
Ask company counsel to have a look and provide input (if you want to be clear on legal perspective)
Have every Board member sign or acknowledge it (ceremony works on humans!)
Review this each January with the Board

4. Shared Committment

Given its a “team” that doens’t otherwise spend their days together, Boards often never form (or easily lose) a shared committment to the team and each individual’s success.

It’s an easy thing to overlook because everyone can put on a good show for 3 hours (esp over Zoom). But if your team doesn’t care deeply about winning, they’re not going to push hard when the going gets tough.

In fact, you don’t really know the strength of your Board until this committment is tested — which always comes eventually — in the form of some major event (e.g. CEO ‘blow up’, financial stress, global pandemic, strategic knock-out blow, etc.)

So this is like going to the gym. Healthy habits will serve you best.

Tactics to Consider:

Even during “COVID times” have at least 1 BOD meeting in person, with a meal
Encourage a “board buddy” system if you sense more ties are needed (work w/ your lead director on this)
Find ways to get Board members into the field - customer visits are the best excuse for team bonding ++ arm your Board w/ perspective they can never get from a slide deck

5. Productive Process

The status quo Board process tends to revert to “The Meeting” without extra effort. This was probably OK during the victorian era when information moved at the pace of horses and sailboats.

But if you try to do all “the Board work” in quarterly meetings (or even monthly ones), it’s going to not work well.

What you want to create is an “Agile” or “Continuous” flow of information, discussion, and decisions. Mark Suster promoted this way back in 2010 The Agile Board and later with his talk on “waterfall vs. continuous” Board loops.

This is easy if you’re a small group - or in Suster’s case you’re literally working with the founder of Tinder (upper end of extrovert scale) - but it is hard to do.

Tactics to Consider:

Ask your Board Chair / Lead Director to own this (a great one will w/o asking)
If you don’t have a Chair / Lead Director (or if you do and they’re not the right person), tap another Board member or observer for the job
Write that “Monthly Memo” (or even bi-weekly) - smaller and more frequent / less formal is even better
Send around your financials on a seperate, regular monthly cadence
Use a system (wiki, slack, whatsapp, google docs) to keep everything in one place

And yes: use a Board collaboration tool like BOSWARE! After all, it’s purpose-built for this :)

6. Constant Improvement

No team ever won the World Cup, World Series, NBA Championships - you name it - without putting in the time and effort to push themselves to get better.

And yet ~90-100% of Startup Boards never ask the simple question: “What can we be doing better as a Board?”

If you listen to veteran Board members talk, however, very frequently they’ll note the best Boards do regular self-assessments (called a “Board Evaluation” in governance circles). This can be led by an outside consultant - or more frugally by a member of the Board or “friend of the company.”

But those same veterans will also concede: nobody ever does this.

Doing ANYTHING on a regular basis to improve your Board is the easist thing you can do to gain an edge over 99% of your competitors.

Tactics to Consider:

Start simple: at the end of every Board meeting, take 5 minutes and ask “What is 1 thing we could be doing better as a Board?” No surveys, no consultants; just literally ask the question and decide on “1 thing to do better.” This is your MVP.
Do a simple ‘annual assessment’ - just a google form - and include questions about the Board just like you would in a team 360. Include anyone who touches the Board (e.g. observers, major investors, management, even employees) —> the more data the better.
Above all else: keep it simple, tactical, and written-down. Just focus on forward progress; the results will compound for you.

Keeping it Simple

You shouldn’t have to read (or do) all the things written down here.

All you really need to do is:

Set the expectation that the Board is a Team, and should be a great one
Deal with the reality that this team is part-time and often distracted / all over the place
Keep making it better and enlisting others to do the same

And of course, sign up for Bosware.

Onward!

Want More?

Whitney Johnson hosts an excellent discussion with Brad Feld & Matt Blumberg on this topic. Well worth a listen!