The Episode In 60 Seconds
Setting up your Board of Directors – the right way.
The right composition
- Get diversity of perspectives and skills, be sure you cover at least: legal, finance and your industry
- Don’t go for titles, go for people with time and expertise
- 4 is considered a good number to start
Founders on the board
- In small companies where they hold a large stake, this may be appropriate
- In large companies, operations and board roles have to be separated
Compensation
- Consider paying a fixed compensation in cash or equity and a variable compensation based on time invested
Where to find the right board members
- Choose people you know you can work with
- If you have smart money investors, they will probably be a good addition to the board
How boards change when companies grow
- Small company boards may be more operational
- As companies grow, boards necessarily have to professionalize and become less operational
Meeting and decision making
- Meetings at most once a month and at least once a quarter
- If possible, decisions should be unanimous or more time should be invested into discussions
- If a board member dissents, be sure to note it in writing
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