Forming a board or similarly high-level leadership team is an inevitable part of your entrepreneurship journey. Often it can happen organically, as part of the normal growth of your business. Or sometimes, particularly in the case of businesses attracting external investment, it can be something that is done early — before the company even has a shape. Before I start, however, it's important to make one crucial disclosure. Building a board is more art than science. You will almost certainly make mistakes (sometimes expensive ones) but, when it's right, it can be one of the most important success factors of your journey.
It is not a science but often about gut-feel when you meet people and get to know them.
Get good people
Many entrepreneurs make the mistake of hiring a table of yes-men. This is great for ego, bad for business. Whether you're looking for custodians to take over the reins so you can step back or whether you want a team to help lead and grow your organisation, you need to hire people who are smarter or more experienced than you in those specific roles. They may often challenge you and restructure your thoughts, but this is important for good governance.
You can put people through as many complex psychometric evaluations as your bank balance will allow but, ultimately, humans are emotional and unusual creatures. You as founder know the culture of the company you're trying to build, and similarly know your own personality and those of your team. Without exception, it's critical that your leadership shares those factors — this is not a science, but often about gut-feel when you meet people and get to know them.
You have to empower your board to make their own decisions, follow their instinct, and execute. Don't tie them down with committees, processes and reporting structures but, rather, ensure that you have good governance structures in place, and that you are available as counsel, and also as support, and that you direct them within the parameters of your overall vision. Think of your board in many ways as a team of entrepreneurs that you're investing in, rather than as employees that you manage.
We're extremely lucky now to have a vast pool of information (Google, LinkedIn, Facebook, Twitter and so forth) at our fingertips. It's essential that you do your research and get to know as much about individuals as you possibly can before you meet them. These are critical roles in your business, and you mustn't go into these situations blind. While there's often a natural reluctance to do so (due to fees!) it's often not a bad idea to take help from good headhunters and recruiters, who can be a skilled filtering mechanism for you in this regard.
It's natural that you'll be excited about your business (at one end) and the prospective member be excited about their role (at the other). Somewhere in between these extreme positions is usually where the reality of performance lies. Don't over-promise, and encourage people to manage their expectations and collaboratively set performance and role objectives.
Let's be honest, nobody works for free (apart from, perhaps, the founders). You have to build the right incentives for your board so that they can share in the growth of your business, without impairing finances and also crucially so that they can reach their own personal development goals in the process. From a founder perspective, always remember — it's best to own ten per cent of a big number than all of nothing!
Take tough decisions
These are expensive people for your business, and they have to perform. As founder, you cannot be scared of taking tough decisions for the good of your business. The longer you let things lie, the tougher (and more expensive) it can be to resolve them.