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How to build a board

by Dan Byrne on Oct 4, 2022

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If you are starting a business or aiming to scale your business you should consider building a board. Why? Because, with few exceptions, every company should have an effective board of directors, one that can guide it through difficulties and take advantage of the opportunities. 

For startups and small to medium enterprises, it’s a challenging concept to get right because these kinds of companies grow and change quickly, becoming hives of activity in a short space of time. 

You must find the time to grow your board properly, despite all this activity, and this e-book will show you how.

“The board’s role is to pull management out of the trees to see the forest.” – Pearl Zhu

First, let’s acknowledge the bad news: startups and smaller companies have an extremely high risk of failure. 

In the United States and the United Kingdom, 20% of startups and other small businesses will fail during their first year. In the long run, 50% usually fail within five years in the US, and a massive 60% will fail within three years in the UK. 

Frightening as these stats are, these same statistics offer hope because behind every failure rate is a reason we can learn from.

The most common factors leading to startup failure currently include:

  • No sufficient market for the product
  • No more cash
  • No competent leadership at the company’s top level
  • Competitors outperformed

These exact reasons – strategy, funding and proper guidance –  are things that boards can help control; this is why building a board is one of the most important things a startup or SME can do. 

Look for wisdom when building a board

‘We are our choices. Build yourself a great story.’ – Jeff Bezos, Amazon founder

Boards can grow and change just as the company does. For most small businesses, having just one board member, and filling that position with the founder or CEO, is a good starting point. 

It’s what happens next that some may struggle with. 

Fortunately, building a board can be simplified into a step-by-step process, with important do’s and don’ts along the way, moulding your board into the beacon of good governance it’s supposed to be. 

A good board-building process will:

  • Incorporate basic knowledge of how boards work and their role 
  • Decide how big the board should be at any given time and why
  • Prioritise finding the right skill sets and backgrounds
  • Be aware of the market’s ability to provide suitable candidates
  • Include a good on-boarding structure so that all directors start strong and work efficiently

The key is to ensure that board-building is part of the company’s strategy from day one so that the firm is never “chasing” more directors in a moment of panic. 

By reading this e-book, you will have a solid understanding of the topic and be able to see what areas may need further attention.

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