Startup CEOs, Is Your Expansion Stage Board Still Relevant?
Last week I talked about how a CEO or Founder should make sure that their Mission and Vision are still on target based on how the company, the competition and their markets have evolved over the last 12 months.
Last year I wrote a blog post about how OpenView works with a portfolio company after investing growth capital to build out their board with independent board members.
What I want to discuss today is the need for the CEO or Founder of an expansion stage company who currently has a board to annually look at the current board members and ask yourself:
- Are they still adding value?
- Are they still relevant to your current Mission and Vision?
- Would a different board member with a different profile and skill set add more value?
- Does the Board need to be expanded to add a profile or skill set that is needed?
This can be a difficult process for many CEOs and Founders because of the relationships they may have built with current board members who have helped them get their companies to where they are today. But you need to ask yourself whether they can they help you get the company to where it needs to be in 2 or 3 years.
For most any company, the board member profile and skill set of what they needed early on on their growth cycle will differ from what they need as an expansion stage company. For instance, early on the company needed board members who had:
- an individual with marketing proficiency or
- individuals with heavy skills in a specific industry or operational area of business
But today, the same company — now expanding beyond its infancy — has different needs when it comes to the skill sets of its board:
- an individual with relevant CFO experience to chair the audit and compensation committee
- a CEO who had a successful exit with relevant experience with their market segment
- a senior operational executive from a large public company who can help with networking, relationships or business development
- a senior operational sales executive with experience in channel development or international sales experience
I could go on, but you get the idea.
The board is one of the major tools that if leveraged properly can help a CEO or Founder build a great company and realize its vision with a successful strategic exit or IPO. A board position is not a lifetime role. Depending on the answers to the the questions above, a responsible CEO or Founder in a changing company will do the right thing and rebuild the board according to where the company needs to go versus where the company has been.
It’s not an easy decision, but most important ones in life aren’t.
We hope this framework makes planning during this uncertain time feel less like summoning a crystal ball and more like navigating with a map.
In this environment, it doesn’t matter if you’re the CEO of a startup or a well-established company—you’re going to have to make some difficult choices that will probably keep you up at night.