“Few of you would turn me down if I offered you a resource that would help you to gain market share, improve profitability, and make better decisions. Yet among the thousands of business owners I’ve met, mentored, or addressed over the years, four out of five do just that when they fail to set up an outside board.” –Clay Mathile, Aileron Founder & Chairman of the Board
In this post, Aileron Founder Clay Mathile describes the 4 steps to take in order to create an outside board.
1. Recognize the Benefits.
When I formed my first board, I made a classic mistake: I invited my friends and personal advisers (accountant & lawyer) to join, thinking that they were best suited to help me make the right decisions for my company.
I learned quickly that this was not the case, as personal advisors—well-intentioned or otherwise—can try to control the decision-making process to benefit their own interests.
In 1985, I started over, hired a consultant, and got to work on creating a new board, this time seeking board members from outside.
Why an Outside Board?
In short, here are 3 key reasons:
- Your outside board can be the inside sparring partner who tests your perceived strengths and weaknesses before you get to the marketplace
- This group of peers has nothing to gain or lose by offering an honest, objective perspective on your business plans and strategies
- An outside board is willing to take risks and come up with creative ways to handle new challenges and opportunities
2. Start Your Search.
Once you’ve decided to create an outside board, write down all of the qualifications you hope to see in a board member. You can use this list to build a list of potential candidates.
I chose to seek risk-taking peers who:
- Were engaged in a general management position, with responsibilities at least as significant as mine and a high level of experience
- Possessed a high degree of honesty and integrity, as demonstrated in their business dealings
- Had functional strengths consistent with my company’s key business strategies
- Were people whom I liked and respected, and who I was confident felt the same about me
Keeping your criteria in mind, you can begin the search process. One good way to begin is to list all of the companies that you know by reputation within one hundred miles of your hometown, and find out the names of the CEOs or COOs.
Ask your business advisers, lawyers, bankers, and accountants if they know anyone on this list. If they do, and if the CEOs or COOs in question match your criteria, ask your connection to introduce you to potential candidates.
3. Select Your Board Members.
Your next step can be to set up a lunch meeting with each potential candidate. If the chemistry is right, invite the candidate to tour your company. Send the candidate a sample product, a brochure, or a complimentary coupon to give him or her a feel for your business.
During the initial visit, introduce the candidate to your key managers and allow ample time for conversation and questions. Is the candidate becoming interested and excited about your company? If so, you are on the right trail. If you are met with little enthusiasm, it may be best to keep looking.
4. Finalize Your New Board.
Give yourself 6 months to meet candidates. Plan to have them visit, get acquainted with your leadership team, and establish relationships with you and your company.
After the selection process is complete, set a date for the first board meeting. Send all board members pertinent information about the company a month in advance of the meeting.
This information may include:
- Company vision, mission, and values
- Overview of products and/or services
- Overview customer segments
- Organization structure
The faster you can educate new board members, the faster they will become productive. There is a danger in sending too much information, but it is better to send too much than too little.
Learn More About Creating an Outside Board
Ready to learn more about the value of an outside board—or do you want to take your current board to the next level? Aileron’s High Performing Boards program is designed for privately held business owners in need of help and advice in terms of learning how an outside board can offer an eye-opening, incredibly helpful, and low-cost alternative to being alone at the top.
Come to this full-day program to learn about this invaluable resource that can help you set the direction of your organization with ongoing, targeted expertise.
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