Board Games: How to play


Like venture guy Fred Wilson, I’ve spent a few years interacting with Boards of Directors – as Chairman, as Investor-appointed Director, as Founder, as Executive and as Legal Commentator. I’ve also interacted with Boards that presided over multinational conglomerates, public research institutes, venture firms and startups.

Perhaps this is why when I read Fred’s views on “Choosing Board Members” it really resonated. He sets out 10 thoughts on the topic and each and every one is worth repeating:

  • Avoid “big names”  For the most part, they are useless. [Hmm, Australian companies are particularly prone to this foible. There is a cabal of “names” that tend to crop up on so many boards – have a good look at the share price of Jumbuck and tell me if its ‘name’ has made a difference to its tumble. Similar situation over at Bluefreeway.  Oh well, I’ve offered to help both companies but that’s not for this discussion.]
  • Select people who will attend each and every meeting, who will pay close attention to the business [Totally agree – avoid pigeon directors who fly in, make a mess of the board papers and then fly out]
  • Select people who have an affinity for your business, who understand your challenges and your opportunities [ Oh how true – a property investment banker is highly unlikely to add value to your high tech business]
  • Avoid putting someone you can control on your board. In tough situations they will have a fiduciary duty to do what’s right and you won’t be able to control them when it matters most to you. [Besides the reason it may backfire, it will also get you into hot water with your corporate regulators and most likely get you sued – after your board has fired you, that is]
  • Don’t let conflicts get in the way of selecting the ideal board member. Conflicts will be disclosed and can be managed. Many times the people who will understand your business best are conflicted in some way. There are ways to deal with this problem.     [ this is true, but needs to be handled very delicately – I am currently watching a situation very closely where a board member of one company is also a formal adviser to a direct competitor…I’ll keep you in the loop as it unfolds]
  • Make sure to have an experienced accountant/auditor on your board and have them run the audit committee. That is no place for amateurs. [Indeed, but don’t let the beancounters get in the way of the business, unless you are playing a complete numbers game]
  • Make sure to have at least two or three CEOs of comparable companies on your board. Make sure they are on the comp committee. Compensation issues are best handled by people who understand the talent market. [Fred makes a good point here. They should also be of use when it comes time to discuss valuation multiples tied to a fundraising or exit]
  • Select people who have the time to do the job right. Being a board member is a job. It’s not a retirement perk. If someone cannot commit to attend each and every meeting and to spend at least several hours a week on your company, they are not the right choice. [Umm, this is a repeat of point two, but its important so it bears repeating]
  • Select people who will get along with each other. The very best boards I am on are friendly social active groups. Serious business doesn’t have to be stilted and formal. It can and should be fun. [Life is too short to seek acrimony. Friendly and social is good, but not at the expense of adding value to the business – remember, as CEO that is your core metric and reason for being – ask Jason Goldberg – see his first point on his learnings from being CEO at Jobster]
  • Above all else, look for great judgment and ethics. [When times get tough and decisions are not black or white — these points are golden]

[Picture courtesy of Baboon]

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2 thoughts on “Board Games: How to play

  1. Mike Mossberg, I know you reading this forum, please contact me, because I can’t find your contact details.

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