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10 criteria for selecting board members

Over the course of my career, I have run more than 20 startup ventures and served on more than 10 boards of organizations I didn’t run. One thing I learned is that one of the keys to organizational success is surrounding yourself with a smart, experienced, diverse group of outsiders who will challenge your assumptions, help drive sales and recruit star players to join your team. Often leaders surround themselves with “yes people” because they are afraid of losing control and of someone challenging their vision. Leaders who don’t encourage and can’t handle spirited discussion shouldn’t be in charge. They are endangering their investors’ capital, their employees' livelihood, their clients and, most importantly, their own futures. Some leaders are afraid of bringing in outside people they can’t control because they are concerned about the outsiders turning on them, challenging their authority or disrupting their plans. You have to be confident enough to handle and embrace divergent opinion. If you are thinking of putting together a board, I would suggest the following 10 criteria for selection.

1. Innovators/creative problem solvers No matter how successful your product/service is, you will need to cannibalize it at some point or your competition will do it for you. Or you will be stumped by a problem that is hindering your success. Creative thinkers come up with new and alternate solutions that help drive companies to new heights.

2. Challengers Every board needs someone to play devil’s advocate. If assumptions aren’t challenged, then they will be exploited by the competition. You need someone to put out potential weaknesses.

3. Strategic thinkers Leaders don’t see all of the possibilities because they are in the middle of the forest. They are dealing with the present. There needs to be someone who looks at the field and sees all of the opportunities.

4. Diversity This means people of different ages, ethnicities, skills, experiences and educational backgrounds. A 35-year-old woman with an Ivy League education sees the world differently than a 55-year-old white man.

5. Sales experience Most leaders come from the product development, financial or marketing side of a business. Few founders of companies spent their careers in sales. Having someone who has built a sales force, hired sales executives and was on the front line selling can accelerate growth.

6. Marketing experience Although many leaders have marketing experience, having an experienced marketer from a direct marketing or advertising firm can be of great value in thinking through how to build your reputation and brand.

7. Industry experience Knowing the industry is important for understanding the competition and getting an outsider's perspective about what differentiates your business 8. Capital-raising experience Raising capital from angel investors, venture capitalists, corporate investors, banks and factors requires knowledge about how to structure deals along with introductions.

9. Finance experience Yes, you can and will hire a part-time CFO who will have experience working with funding sources, vendors and figuring ways to reduce cost, but to have a finance expert to discuss how to leverage assets and debt to scale the business or negotiate with creditors can help the company better manage its cash flow.

10. Leadership development The stronger the management team, the better positioned a company is to take advantage of opportunities. Good leaders need to understand how to develop talent to maximize the company’s potential. Attracting a board member with experience in cultivating leaders can make the difference between success and failure. Who don’t you want on your board? There are three groups that you don’t want or need.


Source: https://www.bizjournals.com/bizjournals/how-to/growth-strategies/2017/09/10-criteria-for-selecting-board-members.html

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