Copyright 2008 Vinny Ribas

 

It is impossible for one person to know and do everything necessary to build a strong and profitable business. That is why wise business leaders assemble a strong team of advisors, including a knowledgeable and experienced Board of Directors. All too often, however, the wrong people somehow end up on the team. By ‘wrong people’ I am referring to people who perhaps do not bring enough to the table, do not have the necessary expertise or skills, or are duplicating the skills and expertise of another board member. 

The truth is that developing the right Board of Directors and the right Board of Advisors is a skill in its own right. Choosing the right players needs to be deliberate and calculated. Each member needs to fill a previously identified, critical role. They all need to speak the same business language and be able to work together like a well-oiled machine. Their integrity, morals, work ethics and vision must all be identical to that of the CEO.

The wrong people, on the other hand, can cause resentment from those team members who are truly qualified. They can bog down the governing and decision-making processes by their need to always play ‘catch-up’ or have things explained to them. They might cause harmful decisions to be made. Since they represent the Company, they can reflect negatively on it. They do not fill a necessary role on the board, so their level of responsibility is not balanced with the rest of the team.

How do you avoid putting the ‘wrong people’ on your team? Here are some suggestions:

• Understand the difference between a Board of Directors and a Board of Advisors. Your Board of Directors are most-often long term members of your team who are given responsibility for overseeing a specific area, field or operation of the business. Sometimes they are also officers in the company. They most often receive some kind of compensation, such as a monthly stipend, stock options, stock etc. Your Board of Advisors can be long or short term, and are there to provide advice and guidance without having being held directly responsible for any portion of the company. Advisors are also compensated, though not as much as your Board of Directors. Often their compensation is tied directly to work that they perform for the company (writing the business plan, making introductions to investors or strategic alliances etc.)
• Define the exact roles that you need to fill on your Board of Directors before you recruit the first person. Be sure that you have outlined what you expect from them, what their responsibilities will be and what experience, knowledge or skills they need to demonstrate. Depending on the nature of your business, the most common board positions you may want to fill include experts in the fields of strategic planning (sequencing), finances, marketing, technology, operations and often someone from your industry. In essence, determine which areas of your company need one person who can guide and direct it and create a director or advisory position for that purpose.   
• Limit your team to those key people who can work together seamlessly. Don’t offer positions to everyone who wants to be a part of the company or who ‘gets the vision’. It is not only possible, but sometimes fatal to have a team that is too big. The result is often an unmanageable, unorganized group that doesn’t work well together.
• Qualify everyone. Don’t recruit friends, relatives or people who have simply ‘been there’ for you without checking their qualifications. Each person on the board should have responsibility over a particular division or function of the company. You need competent and experienced team members to fill those roles, without compromise.
• Stick with your outline of what positions you need to fill on your team. Don’t let anyone bully you into putting them on your team. For example, don’t offer positions to relatively small investors unless they bring more to the table than just their money. Some investors want to ‘guard’ their investment, and that can take the control of running the company away from you. Also, don’t offer positions in return for favors or support. You can find other ways to pay people back for their kindness.
• Be patient in finding the right people. Don’t offer positions just because you don’t want to tackle the project alone. Keep searching until you find the ideal candidate.
• Do complete background checks on your key players. Never offer a board position without knowing if something in their past is going to come back and haunt you. Check all of their employment history and references. Be sure that they have demonstrated success in the field that you want them to take responsibility for. Remember that someone can have 25 years experience in an industry without ever having been successful at it. Pick demonstrated leaders. Don’t set yourself up for unwanted surprises somewhere down the road.
• Interview your prospects thoroughly. Never offer a position to someone without knowing whether he or she is a team player. Be positive they share your vision and your passion. Make certain it is someone you can work with for at least 3 years.

Your team is the driving force behind your company’s success. It is impossible to keep forward motion if the team is not pulling its weight. You need to be 100% confident in your team at all times. The only way that you can accomplish this is to pick the right people to fill all of the roles that need to be filled. You may end up going through quite a few personnel changes to get there, but you will know when it’s right. You will feel so much weight taken off of your shoulders, and you will lead the company with passion and confidence!