Boards should help, not give you a heart attack

How and when should you set up a board?

It was our first ever lastminute.com board meeting and we thought we were going to have to call an ambulance before it had even started. We heard the wheezing for several seconds before we saw the hot face of our new chairman, Pieter Bouw, appear at the top of the six flights of stairs that led to the office. Brent and I breathed a sigh of relief that the newly retired ceo of KLM airlines was not going to have a heart attack as agenda item one.

I was nervous before that inaugural meeting. We had prepared everything - detailed spreadsheets, suitably overexcited updates and a plate of biscuits. We did not however prepare for the lift to break. It is a daunting task establishing your first group of directors. When is the right time to set up a board? What skills should you look for? How should you manage them? 

In my opinion, you don’t need to race to set up a formal board. Many startups and even some scale ups do very well by engaging with a network of advisors or people who are loosely connected to the company and who can answer questions, push you on targets or introduce a useful person. Boards take time and administration and if you are grappling with product launches, fundraising, hiring, then you might not want the extra work. 

If you raise outside funding or want to have more transparent governance, a board can help. New  investors will probably want to have board seats to spy on you. Sorry, I mean help you. So, it is also the moment when you should start thinking about the ways to maximise the power of your board and minimise the pain. The people you hire and the processes you set in place at the start set the culture for a long time to come.

Firstly, the people. I would start by finding your chair. Most other directors will want to know who he or she is and they will be the anchor of the board. They can also open up their contacts to help you recruit others. Chairs really set the tone for the board and a good one will be a massive boon to you. 

In the organisations I have co-founded, we have then tried to find people who have expertise in the sector in which we are launching. If you do not come from the sector yourself, it can be a boost to credibility. We lucked out at lastminute.com when we recruited Linda Levinson, who was an ex ceo of American Express so brought extensive  travel business knowledge. Linda was a phenomenal and wide ranging leader (and a bonus for me that she was a woman).  Having a great strategic brain as well as deep industry skills, is a killer combination.

 I have also seen boards recruit exceptionally talented domain experts who do not work out. Proceed with caution and stress-test your candidate’s ability to contribute across multiple axes. You think an AI technologist is what you need right now, but they might not be the person to help with the majority of your startup challenges.

 Next, process. Smaller boards are more effective than larger ones. Keeping numbers around six to eight allows for better, more focused conversations and keeps bureaucracy at bay. However wonderful your directors are, they will take attention. You need to coordinate diaries, organise travel, answer individual questions about the business outside of the meetings  - so less is more.

You should also think carefully about how many meetings you want and what the flow of information should be. I recently read the results of a survey of non-execs and overwhelmingly they thought companies' board packs were too long and too dense. Don’t feel that you have to produce masses of information to keep your board up to date. 

Boards want to feel in touch and relevant but there are multiple ways you can do this outside meetings. Try regular zooms where you have more relaxed conversation without formal papers or how about setting up live board documents that both management and board have access to, so provide a shared snapshot of the business at any time. In my experience there is too much politicking around what boards see and the more open you can be, the better. 

Finally, try not to let your board become too dominant in your daily priorities. I once observed a CEO who  spent a good chunk of every week calling and updating and maneuvering us, his board directors. The business was taking second place to board management. This was nuts. The best boards amplify and help, but don’t require constant diplomacy. It can be hard to remember, especially when business is tough and you are anxious about board reactions. If things do feel they are going in the wrong direction, then use your board. Share your anxieties, keep in close communication, don't hide bad news, but never think your board runs your company, you do.

Building a diverse, high functioning board is challenging. At the very least trying not to give yourself or your new board colleagues a heart attack seems like a good guiding principle.