Assembling the right board of directors is key to long-term success in a startup venture, Vaughn Emery, CEO of the mobile communications firm Centri Technology, told students during a talk hosted by the Entrepreneurship Club on October 3. A strong board, he said, can provide guidance and help business leaders avoid potential pitfalls.
Start with a small board of three to five members when launching a company, to keep things manageable, Emery suggested. And keep these tips in mind for long-term success with your board:
- Assemble a team of experts, not family and friends…but keep family and friends close: A good board of directors should be comprised of professionals who are knowledgeable of areas outside of the company's expertise. But keeping a strong support group outside of the company is also key. "You need to have a strong group because they'll keep your company focused on its goals during the day, but you also want to make sure you have just as strong of a group for when you come home at night," Vaughn said.
- Dig deep on reference calls: When new potential board members seem like a good fit, Emery advised students, ask tough questions while calling their references. "Sometimes people won't want to tell you everything because you're calling them for a reference," he said. "It's your job to ask the tough questions. Be ready for tough conversations, but they can pay off."
- Pick board members who will stay engaged: Although they are not involved in day-to-day operations, Emery said, board members should be ready and available to help should questions arise that could shape the company's future. "If you send an email and it takes them three days to get back to you, then it's taking too long," he said. "If your stress level is high and they act calm, that's a good sign."
- Lead your board: While board members may have found success in their own business ventures and leadership of other organizations, Emery said, it's important for entrepreneurs to provide the long-term vision for their company. "They lack operational context, so they may not know what you're doing every day," Emery said. "It's their job to be a sounding board for your ideas, but you have to lead."