Different types of boards: startups vs big companies

Different types of boards dictate what kinds of skill sets you need and the goals you’re setting out to achieve. This corporate governance training guide focuses on the differences between boards of startups and boards of big companies. Understanding the differences between these two is crucial for tailoring governance practices to a company's specific needs and stages of growth. This guide explores the distinct roles and structures of boards in startups and large corporations and offers insights into the governance goals and board compositions that are optimal for each. Different types of boards: the main corporate goals Before we analyse how boards operate in new vs established companies, let’s quickly look at the business goals of each: The main governance goals in a startup: Strategic guidance and vision setting: Startups are often at the mercy of larger market trends as they work to establish their niche. Because of that, their boards must always define and refine the company’s vision and strategic direction amidst rapid change and uncertainty. Resource acquisition: Startup boards face challenges in finding and raising capital and resources to make their businesses viable. Risk management and oversight. Startup boards must begin from scratch and establish a framework to identify, evaluate, and mitigate risks in a high-stakes environment. The main governance goals in a big company: Sustainability and growth: Big company boards must ensure long-term sustainability and have a clear roadmap for achieving it. Compliance and regulation: Big companies are often in the public spotlight, so they need to ensure they adhere to local and national regulations on reporting and compliance. Stakeholder engagement. Big companies usually have many stakeholders who need constant updates and good communication to remain satisfied. Different types of boards: the details Here’s a top-level look at the differences between startup boards and big company boards. The type of board a startup needs Flexible and adaptive. Good startup boards can quickly change their goals and priorities to adapt to the changing market and the shifting avenues where they can achieve maximum growth. It goes without saying that this kind of board needs serious industry experience to recognise trends, coupled with finance and risk management. Hands-on and engaged: Startup boards should never have members with only a fleeting interest in the company. Instead, members should be willing to provide daily or (at least) weekly guidance and support. Composed of experts: In addition to the skills mentioned above, it’s also crucial that startups have some kind of entrepreneurial experience on their board. This skill set will enable the company to persist at a very tough stage in its life cycle. The type of board a big company needs: Broadly skilled and diverse: True diversity on boards means different ages, backgrounds and skill sets. Big companies should understand this from the start. It helps reflect the diverse concerns of a global enterprise. Strategically minded. Big company boards should be focused on long-term strategy and policy-making rather than day-to-day operations. Experienced in governance: Big company boards should always have members with experience navigating the complexities of an established. Moreover, they should ensure this experience never falters as board members change through the years. Should you serve on a startup board and a big company board simultaneously There’s no hard rule either way. So, your best bet is to weigh your pros and cons: The pros are that it gives you - the director - a broad perspective on governance at different development stages. This will enrich your understanding of strategic thinking. The cons are that you must constantly check for ‘overboarding’ issues such as time constraints, conflicts of interest, or the challenge of switching mindsets as you move between companies. Any of these require careful examination of your future capacity. In summary The type of board appropriate for a startup versus a big company differs significantly due to the distinct challenges and objectives each faces. Understanding these differences is crucial for anyone looking to serve on a board or manage board operations effectively. Whether considering a role in a startup or a large corporation, aligning one’s skills and experiences with the company's specific needs is key to effective governance and personal career satisfaction.

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Rapidly acquire the skills and knowledge you need to lead.

Diploma in Corporate Governance

Certified Corporate Governance Professional

Certified Company Secretary Professional

Certified ESG Professional

ESG Strategy and Governance

Company Secretary

Overview of Corporate Governance

AI Governance

CSRD Reporting

Go Further With Membership

Join the largest global educator of university credit-rated and qualified directors in corporate governance.

University partnership

Attend online and in-person events to get the practical skills and insights you need to make an impact as a leader.

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Insightful and thought-provoking content to help you become a great board director.

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Different types of boards: startups vs big companies

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