How to Recruit a Board of Directors

Top 4 Ways a Board of Directors Will Strengthen Your Company

Today, I need a board of directors for my life. This is one of those days when I am not swept along by any pre-existing agenda, or by the demands of clients, or by a fixed schedule of any sort. Today I am quite amazingly free to set a new direction for my time, my business, and my life. Many people never have days like today; many people choose to avoid such days. A day like today has raw, open-ended promise. It can be a liberating turning point, or a paralyzing waste.

Companies in a Rut

Businesses, too, can embrace, or avoid, these promising crossroads moments, when something truly new beckons. If you are an entrepreneur who has broken away from the regimentation of corporate employment, you vividly recall the initial thrill of being powerful, unfettered, and free to follow opportunity in any direction. But, two fundamental facts catch up with your business:

  • The Swamp. Conceiving a business is one thing; slogging through all the implementation steps is another. The thrill gets lost, and your boldness is drained, when you are buried in grinding work and living with the consequences of your earlier decisions.
  • Fear. Wide open freedom, and the responsibility and risk that come with it, can make you and your team feel deeply uncomfortable. As organizations and as individuals, we all tend to shield ourselves, by getting into familiar routines, by closing our eyes to possibilities, by giving in to obstacles, by being lulled into accepting the status quo.

The result is that many companies get stuck in maintenance mode and fail to use their precious flexibility, freedom, and focus to make genuine progress.

Board is Better Than A Boss

An effective Board of Directors with outside members can keep the power of entrepreneurial companies alive. Their two fundamental contributions:

  • High Standards. Accomplished directors have the drive, the experience, and the perspective to appreciate what a company truly ought to achieve. They can raise the bar of expectation, giving the management team a standard of excellence and accountability.
  • Direction Setting. Directors with specifically relevant experience can make a company a lot more confident in making long-term decisions. The lack of such confidence is a main reason companies get stuck.

Some entrepreneurs reject this amount of involvement from “outsiders” because it feels too much like having an interfering boss again. But, once convinced that the Board “interference” is going to make the company more successful and valuable, an entrepreneur who really wants to build a great company will welcome the Board involvement. An entrepreneur who rejects this opportunity for company excellence will send a message of mediocrity to employees, customers, and investors.

Other Practical Benefits

The right Board will strengthen the company in four other specific ways:

  • Luster. Well-known Board members put the company in a good light. Their decision to serve is an endorsement that impresses customers, employees, investors, the media, and suppliers. It gives immediate credibility and news value to the company.
  • Contacts. Board members who have relationships of trust with the right people can open doors in minutes that the company alone could not open in months, or years. At one company, I helped recruit two outside Board members. Within days, both new members made introductions that could lead to stunningly positive changes.
  • Tactical Advice. Board members have “been there.” They can give quick advice on all manner of questions, including hiring, firing, facilities, insurance, vendor selection, organizational infighting, motivation, financial controls, banking, and so forth.
  • Personal Support. For the entrepreneur, who after all has a lonely job and sometimes not a soul to talk to inside the company, Board members can be a wonderful support, a shoulder to cry on, a sounding board, a comfort, a source of encouragement.

Recruiting Process

The Board is useless if it always agrees with you or tells you what you already know. It is also useless if you ignore it. So, begin recruiting only if you are determined to get people who are more experienced than you are, have different perspectives than you have, and who can project authority and credibility to you. Define the specific strengths you need, and estimate whether one, two, or three new people will be required to cover them. Decide exactly the demands you will place on the Board (meeting frequency, amount of involvement in operations, compensation package, term).

Make a list of candidates you know, but don’t stop there. Think of logical places to hunt for candidates, and think of people you know who can lead you to good candidates. Aim high and don’t eliminate competitors. Candidates who decline because they are too busy or because they have a conflict of interest can become valuable friends of the company. They can also suggest excellent candidates. Decide how to score the candidates and then rank them. Extensive research at this stage is probably a waste of time—you will learn as you go. Rehearse your pitch on some middle ranking candidates. When you feel ready, start at the top of the list. Make direct phone calls first, follow up with a thorough letter and package of background information, and then meet face to face. Meet with two to four people for each slot.

In your face to face meetings, keep careful notes, and use a format that will allow comparisons across the field. Capture the full texture of the person; don’t allow yourself to reduce a two hour meeting to just one or two memorable points, unless they are truly decisive. Make your final selection with great care. Aim for a balanced team and a range of strengths, as well as excellent individual choices.

Consider using an outside firm to help you. It will be more efficient. But, I tend to recommend against it because the process of identifying and meeting with candidates can open so many doors if you do it yourself. If you don’t care enough about the process to devote considerable time to it personally, it may be better not to begin.

Start Now

Take the plunge. Don’t miss the opportunity to have excellent, committed, successful people on your side, leading you and your team to fulfill the promise your company has. You cannot lose anything really worth having, and the possible gains are the ones you got into business to achieve.