Seven questions to ask when selecting directors for an early-stage growth company
Historically, the search for board members in small early-stage growth companies is limited to the personal networks of the founders and those already in the organisation. It is a convenient approach that ensures that founders remain in their comfort zone at the expense of creating value. The role of a board varies throughout the various growth stages. In an early-stage growth company, a board has more the role of a resource rather than control.
To ensure that your board is able to fulfill this role, asking these seven questions is an important place to start:
- Can the directors bring relevant and valuable connections to the table to help the company generate revenues, accelerate hiring, and/or unlock partnership opportunities?
- Do the directors add credibility to what you are doing? Or is it the other way around that you give them credibility? If it is the former, it sends a strong signal to customers, partners, and potential investors that your company does not only know what it is doing but that other respected names in the industry believe in you.
- Have the directors "been there" and "done it" in your market or a market relevant to yours? If they have, it can help speed up decision-making processes, avoid pitfalls, and serve as a sounding board for new ideas.
- Do the directors have a financial background and can help you raising funds and match the amount and types of capital with the company's strategy and objectives?
- Do the directors share your values? The multibillion-dollar wealth of some tech entrepreneurs can easily cloud the vision. It is a bumpy road with many ups and downs. So, it is important that you share the same values that allow you to go through the lows and enjoy heights.
- This one relates to the question of the values. If the central role of a board is that of a resource, you need to ask: Do you feel comfortable using the irectors as a sounding board? It can be lonely at the top. The right directors can provide strategic and operational advice, savvy business judgment, good governance and financial insight if you feel comfortable with them.
- Last but not least, are the directors aligned with you about the purpose of the board? If you set up the board in the belief that it is a resource and the directors believe that their role is that of control, conflicts are eminent.
Emilie joined techUK in June 2021 as the Programme Manager for Digital Ethics & AI.
Prior to techUK, she worked as the Policy Manager at the education charity Teach First and as a Researcher at the Westminster think tank Reform. She is passionate about the potential of technology to change people's lives for the better, and working with the tech industry, the public sector and citizens to achieve this.
Emilie holds a master's degree in Philosophy and Public Policy from LSE. In her spare time she is currently trying to learn Persian and improve her table tennis skills.