Robert Finocchio, Venture Partner
14 Rules for Managing a Board of Directors
Managing your board is really code for “How to be more successful as a CEO.” Why the advice? For many new venture CEOs “managing” a board is a new experience. It is very different from their previous experience of “having a boss,” and often the source of unnecessary anxiety and distraction. I’ve compiled 14 rules for managing a board of directors that run the gamut from the obvious, but often overlooked, to the not-so-obvious.
1.) Stick to the basics
The best way to manage your board is to do a great job managing your company. Never forget, the success of the company is the most important goal and the one that the board cares about the most.
2.) Build a great board
Populate your board with people who you believe can really help you. Look for shared interests and philosophies, but embrace differences as well. Know your weaknesses and select board members who will help guide you in those areas. When you raise money, the board member who comes with the money is as important as the money.
Formally, informally, collectively, and individually, communication is essential. Surprises are frequently fatal so avoid them with communication. When communication wanes, the board sees a red flag.
4.) Encourage independent director relationships
Don’t be a filter between your staff and your board. Open access to your staff will help the board assess the health of the company from different perspectives. Learnings gleaned from this access to staff can inform important decisions. It also a demonstration of your confidence as well as a way for your staff members understanding their own importance.
5.) Get and keep your hands dirty
If you tell your board you have lost a deal, make sure you have been there. If you have won a deal, make sure your fingerprints are on it. You need to be intricately involved in your company.
6.) Be resourceful
Use the resources of your directors’ ecosystems (e.g. recruiting, customer rolodex, PR, training, banking, etc.). This is one of the great benefits, beyond capital, that a VC firm brings to an early-stage company.
7.) Make BOD meetings matter
During board meetings, be in control. Have an agenda. Use time efficiently. Remember what you said last time and demonstrate progression. Know where the meat is and get to it fast. Be direct. Limit finesse. Don’t let the directors find the rocks; always be a step ahead.
8.) Never position the board versus the company
If it’s you or the company against the board, rest assured; the board will always win. Never put yourself or the company in this position.
9.) Push Back
Sometimes directors have stupid ideas and give bad advice. Be open to different perspectives, but have the guts to push back, and do so, when it makes sense.
10.) Build a “safe” relationship with at least one director
Trusted alliances are crucial. Ensure you have at least one unwavering relationship with at least one director with whom you can confide during the most difficult decisions.
11.) Have a plan and measure against it
Have a plan, outline goals, demonstrate how you’ll measure performance, and do it. People have memories, so execute, measure and demonstrate performance on a regular basis.
12.) When failure happens, declare it quickly
VC’s are in the business of accepting risk and they understand the inherent downsides to risk. If a challenge appears declare it quickly, design an action plan and execute to avoid failure.
13.) Be passionate
Most likely, you’re running a start-up because you’re passionate about the technology, the team, and/or the market problem to be solved, etc. Have a genuine commitment to your work, and show the board the fire in your belly.
14) Remember rules #1 and #2
Bottom line . . . the team you build and how you choose to manage that team are the most critical elements of success. You will best manage your board by carefully selecting board members with whom you believe will help you achieve the success the success that you and your company are destined for.