Selecting your first board member can be a challenge, so how do you go about it?
I always recommend business owners establish and work with and advisory board setup first, before committing to formal directorships. This can often be a good win-win situation for both business owner and board member.
Work out what are your immediate needs? Do not confuse specialist professional advice from what you want and will get from an advisory board member. They have two separate functions and purposes.
I personally believe that you need a generalist for your first non-executive board appointment. Someone who is going to challenge and support you and is capable of working across all disciplines from Finance to HR to Sales and Marketing. See my earlier blog posts on this subject
Chosen correctly an advisory board member will be able to help you select and get the best out of specialist professionals such as lawyers and accountants.
As a side note: in many cases I have found as an non-exec advisory board member the first task often is to help companies review their current professional service providers (legal and financial services). To often companies have gone for “cheap” “rear vision looking” providers, who are great at documenting what has gone on in the past and ultimately deliver poor value.
All of your service providers need to add value well beyond their fee. As an example, accountants who do annual compliance accounts for $600 a year typically add no value other than recording history and ticking a box for the IRD.
So where do find a board member?
If you are on a super tight budget (most SME’s are) and are looking at establishing an advisory board I would recommend:
- Put the word out around your network. Ask around fellow business owners who you have respect for. They will have recommendations or if you are on a super tight budget – use a “quid pro quo” arrangement with them.
- Springboard NZ – is a great network of “young” emerging directors, that has a pool of great executive experience and full of people looking to build board portfolios. You can post your request directly on their linked-in group. Linked-in Networks are a great place to find talented people and aid with reference checking.
- Ask your accountant – lawyer to recommend: while in most cases I would not recommend using a lawyer or accountant as your first board member they will have connections and networks of great people.
For those of you with a recruitment budget formal placement services such IOD and specialist placement services – may help you out if you do not have access to an established network. The IOD first boards web site is also worth a visit
- Make sure you create a wish list for the characteristics of your most wanted board member and be open to how you meet it.
- Make sure you select people who “get” businesses of your size and culture. Experience on the board of Telecom could well be a hindrance to your $2M a year turn over company.
- Personally I have a dislike for brand names, franchises etc – please reference check the actual person you are going to be dealing with. See how they measure up and what real in business experience they have had.
- Don’t sign locked in contracts – if they do not work you need to be able to quickly exit them.
- Don’t pay by the hour – you need to feel comfortable the relationship is not being measured by the clock.