This post is part of theBoardlist‘s #BeABetterBoard series of posts and interviews with leading CEOs and VCs from the tech industry. Thought leaders share what they’ve learned while serving and managing boards, what they wish they knew when they started, and what they’re focusing on now. Here are a few of my reflections.
The ideal board member should have skills, knowledge, and a network that is mission-critical to the company, but that you cannot easily hire. Rather than treating your board as a collection of names, use it as a way to fill the critical gaps you don’t have other ways to fill. One of the key challenges in front of Change.org is that it needs to find a way to define both an impactful mission (in this case, empowering people everywhere to create the change they want to see through petitions) and a valuable business model that is connected to that mission. One of the best people I know at figuring out business models that dovetail with impactful missions is Nancy Lublin, who was the founder/CEO of Dress For Success, the CEO of Do Something, and is currently the founder/CEO of Crisis Text Line, which provides anyone who needs it with crisis counseling via SMS messaging. Because she’s dedicated to her own mission, she’s not someone that Change.org can hire as an employee, but Change.org can leverage her unique expertise by bringing her on board as a board member.
You must have a clear idea of how each board member can add value, both individually, and more importantly, as part of the team. Far too many board members are selected for their brand value. A board of directors is a team, not a collection of “all-stars”. Hustle is a critical virtue. A world-famous CEO may look great on an annual report, but she may not have the time to be much help in scaling and running the business. For a company like my recent investment Nauto, which develops autonomous vehicle technology, it might seem like it made sense to target an industry titan. Actually, you want someone who has deep experience with both automotive and high-tech, and who has the time to provide in-depth advice. Someone, in other words, like Nauto’s latest board member Karen Francis — who has experience as an executive at GM and Ford, but also as the former CEO of a tech company AcademixDirect.
When you’re early in the lifecycle of your startup, the main challenge is to get the product to market so it can prove that it has a valuable, scalable business. Therefore, the key criteria for selecting board members is whether or not they have relevant skills (product, sales, marketing, etc.) to help the company get the product to market. For example, when PayPal was pulling together its board, Peter Thiel and Max Levchin decided that rather than looking for an industry expert in encryption or payments, that each would choose their friend who had the most startup experience. As a result, Scott Banister and I joined the board; Scott knew Max and had founded Submit-It and merged it with LinkExhange, while I knew Peter and had experience from founding SocialNet.
When your company goes public the board members have to perform the vital governance role of evaluating the CEO and executive team. The best way to do this is for each key executive to be “owned” by a board member, who will develop a closer working relationship with that executive. These relationships are essential for evaluating the CEO and her potential successors. The art is developing these relationships without undermining the CEO. The board members should have the competence to talk with executives without introducing problems. That means avoiding damaging questions like "So, what is the CEO’s greatest weakness?" in favor of something like "What do you see as the greatest challenges and opportunities facing the company?" This also provides the board member with a window into the thought processes of the executive, their career trajectory, and the state of the business.