The 7-Hallmarks of effective boards - Creating an effective board in a later-stage tech growth company
Investment communities have begun to insist on strong, independent boards as a precondition to more significant investments in later-stage tech companies worldwide. While specific skills and tech sector expertise are present in most boards of later-stage tech companies, this alone does not ensure that a board is performing and effective.
Following extensive research into effective boards, we created the 7-Hallmarks of effective Boards:
- The composition of the board
It is crucial to understand how different areas of expertise, preferred roles in a group setting and personality styles complement each other and fit into the development cycle of the organisation and the value creation plan.
- The ability of the board to use the strength of its members
The individual members of the board must understand their strengths, how they are perceived and how all can be leveraged to implement and execute the growth plan.
- Clarity about roles and responsibilities
Ill-defined roles and grey areas of responsibilities are quite common in tech trowth companies. Clarity and transparency of roles and responsibilities need to be in place to focus on growth and value creation rather than individual territories.
- Joint vision
A clear and common vision and orientation are pivotal. Alignment is crucial but at times challenging to achieve in tech growth companies.
- The ability to resolve conflicts between the board and management
Effective executive boards and their members understand how to resolve conflicts between the board and the Executive Committee.
- The structure and organisation of the board's work
The organisation of the executive board's work depends on the work of the Company Secretary and the interplay of the chairman and CEO. Effective boards understand how to organise and structure their work but not all tech growth Companies have invested in a well-resourced company secretariat.
- Regular reviews and reflections about the board's work.
Regular time-outs, where board members can connect, leave the daily work behind and reflect on their work are crucial to success.
Each and every single hallmark detailed can provide you with a lever to create a more effective and higher performing board in a later-stage tech growth company.
You can read Dr Sabine Dembkowski’s previous blog with advice for early-stage tech companies here.