What is a Good Board of Directors?

For an entrepreneur who has just started a company, the idea of recruiting a board of directors can be anxiety producing. After all, part of the point of starting a company is to become your own boss. Why would you want to bring in not just one boss, but several other people to oversee YOUR company?

There are a lot of reasons to have a board of directors. Some of your BOD may be "inside" directors, people who work in the business every day. It can be helpful to have your vice president of technology on the board. There’s also a strong need for outside investors. If your major investor wants a seat on the board to keep watch over his investment, that’s pretty understandable. Still, it can be nerve-wracking to bring in outsiders to oversee a startup company. The executives are already under heavy pressure to meet schedules and goals. They know that it’s possible that their outside directors may replace members of the management team. So, why do it?

Money is a major reason for bringing in outside directors. As important as your current funding is, keep your eyes on the funding horizon. Having a board member (or two, or three!) who can help your company get cash in the bank when it’s needed is critical. Sometimes it’s follow-on funding from your current investors. However, it could also be providing introductions to other investors for follow-on rounds, or access to a line of credit, equipment leasing or help in landing a contract with a blue chip customer. Money is the lifeblood of business. Board members who can help you keep it flowing should be cultivated.

A prominent board member can give your business credibility. Prize-winning academics can make your potential customers and suppliers pay serious attention to your bleeding-edge technology. They can also provide a valuable check on your technology team or provide insight that can cut months off of your development process. The "right" lead venture capital firm partner as your board chairman can bring everyone else that you need to complete your next round of funding to the table with open checkbooks.

How do you recruit board of director members to help your business? You look for experience, connections and you try to recruit board members who really believe in your company. That may require a prolonged period of courting and education, but it will be worth it if you land a top-quality director who will be working to help your company succeed even when they’re not in a board meeting.

Use your network to find people who can do the job, providing expertise and visibility that will help out your management team. A director who makes personal introductions or accompanies the CEO to important meetings can increase your chances of success significantly. They have the experience and the expertise to really help your management team solve problems.

Need a high visibility director but you don’t have the personal connections? It may be time to talk with an executive recruiter.