I have been in far too many board meetings that sound like infomercials: The CEO presents each department in the best possible light and never mentions any problems. This is pointless if you actually want help from your board.
The relationship between the CEO and the board of directors is unique in the business world. The idea of reporting to a committee of people instead of to a single individual makes managing this relationship much more challenging, particularly for new CEOs with little experience working with boards. The composition of the board will have […]
Recent research on U.S. CEO tenure varies anywhere from 5 to 8 years, but one thing is certain: CEOs have less time than ever to prove their merit. Part of the reason is market dynamism and the rapid changes taking place in businesses today. A CEO who was a perfect fit when he was hired […]
In my last post, I wrote about some red flags when choosing board members for early stage companies. Understanding the function of private company boards will help CEOs select the right members as well as help those board members to offer the right value. Here are the three roles that I think board members serve […]
I have had some interesting conversations over the last few weeks that made me realize many people view the role of private company boards far differently than I do. This may be because many of the board members in these companies don’t have significant board experience. Often they have brought money to the table but […]
I found this article from Aileen Lee fascinating: Welcome To The Unicorn Club: Learning From Billion-Dollar Startups. She looks at the 39 U.S.-based tech companies founded since January 2003 that have reached at least a billion dollar valuation in either the private or public markets. While the whole article has many interesting points, I want […]
In my latest article for Forbes.com – How Do You Evaluate CEO Performance? 6 Ways To Grade The Chief – I discuss a scorecard I developed to help corporate boards objectively evaluate CEO performance. Boards can be one of a CEO’s few sources of direct feedback, but many board members do not know much about the CEO role or how to provide formal input. The scorecard categories correspond to the responsibilities of the CEO that I’ve discussed on this blog and provide a way for boards to give consistent, structured input to the CEO. Check out the article and let me know what you think.
This week in The Wall Street Journal blog “The Accelerators,” Brad Feld and Steve Blank wrote articles taking opposing sides about when early stage founders should start developing their boards. Steve Blank advises against giving away board seats too early and instead concentrating on building an advisory board, which has less power and fiduciary duties. This way, the founders don’t give up too much control too quickly but still receive the benefit of professional advice from experienced people.
On the other hand, Brad Feld advises founders to start creating their boards as soon as possible. The legal responsibilities of board directors make the position more serious, strengthening their commitment to the company. He says this influence can be “transformative” in helping to build the company and raise money.
In general, I agree with Brad on this. What neither one mentioned is something that I think is critical: Board terms for at-large members at early stage companies should be one year and require unanimous approval of the other board members to renew. As Brad states, different stages require different types of board members. Typically, if the board term is not set, it is very awkward to try to remove someone who is not adding value.