How To Find & Choose Your Board of Directors
Almost a year into the pandemic, both large corporations and new startups have raced to keep up with rapid change and market disruption. One thing is crystal clear: innovation and transformation across an entire organization has never been more important. And it start’s at the top.
Having the right executive team and board is crucial to leading a company through unexpected change and turbulent times. We’ve witnessed companies with traditionally minded boards stand still while more progressive and innovative boards accelerate forward. There is a lack of diversity and new-world skills to equip executive teams with the brain trust and leadership needed to become more like startup entrepreneurs and less like traditional cookie cutter boards.
Companies need to say goodbye to old-school board members - not simply an age issue but those out of touch with today’s digital economy or stuck in the same business category without any other frame of reference. These boards and executive teams lack the creative thinkers, technology disruptors and digital transformation leaders to accelerate and not decelerate innovation. In the words of Brand Transformer Joe Jackman, in his latest book The Reinventionist Mindset, those leaders and companies who resist change will “Ride the status quo off a cliff”. Your board needs to bring creativity, and contrarian views, a completely different perspective to make change and growth to happen. Who you choose as advisory board members reflects your priorities and potential to innovate and accelerate growth to investors and stakeholders.
How many board members should there be?
The minimum number for a board of directors is three. And although there’s no maximum, having more than 9 members can deteriorate a board’s effectiveness. Finding times to meet will be tougher as will facilitating productive conversations. To avoid ties, many companies choose an uneven number of board members.
Currently the average size is 9.2 members, and some analysts think the ideal size is seven.
What makes a great board of directors?
CREATIVE PROBLEM SOLVERS
If the past year has taught companies anything, it’s that you need to be ready for disruption and fast at solving new problems. Oftentimes, executives can be too deep in the forest to see beyond the trees. Good board members use their unique perspectives and experiences to find creative solutions to complex problems that were not considered before. Look for directors who can demonstrate how they’ve turned a curve ball into a home run in their past.
CHALLENGERS
Board members should be your critics and allies, helping to identify blind spots and bring forth strategic solutions. To do this effectively, a level of openness and honesty is required. However, over one third of directors (36%) say it’s difficult to voice dissenting opinions. This problem traces back to two root issues, with 52% of directors saying they muffle challenges to maintain a collegial atmosphere and 32% saying it stems from dominant personalities. When choosing your board directors, it’s important to understand how comfortable they are voicing non-conforming thoughts and how they handle the challenges of others. Without this skill you will have a group of ‘Yes Men and Women’ (more like Yes Men with the lack of Women in Board seats).
INDUSTRY EXPERTS
Finding directors who know your industry seems a bit obvious, especially if you equate industry expertise with product or market expertise. It’s undoubtedly valuable to have directly-related industry veterans on your board. However, it’s also valuable to have industry expertise not related to your business vertical. As digital transformation and emerging technology re-shape entire industries and consumer behaviour, it’s become increasing important to have directors with emerging tech, AI, ecommerce, product, design thinking and data expertise - regardless of industries they come from. Look for directors who not only have experience in where your company has been, but who have the unique experience that could redefine where you go.
INNOVATION
In today’s environment, you either innovate or die. New competitors are emerging quicker than ever and so is new technology. These non-stop waves of change require innovation leaders and strategic agility to pivot businesses on an ongoing basis. Every company - and especially matured companies - need board members who have spearheaded large scale innovation and change management.
DIVERSITY
It shouldn’t come as a surprise that diversity improves a board’s effectiveness. 94% of board directors say diversity brings unique perspectives to the room and 83% report it enhances board performance. And while most board members and executives support increasing gender and racial diversity in their companies, there has been less movement at the board level. Stakeholders are demanding companies do more, and the positive impact of diversity should be motivation alone for companies to prioritize bringing more diversity to their leadership.
How to find members for your board of directors
Finding and selecting the right board members can be a challenge - but one that is critical to the long term success of your company. In a 2020 survey by PwC, about half of directors (49%) said that at least one of their fellow directors on their board should be replaced - and about 21% said two or more should go. These results indicate that companies need help finding the right leaders, experience, and mix for their board.
At Ari Agency, we specialize in finding executives and board members for high growth and innovative companies. We’ve made up our own team much like a board itself - with a diverse set of senior leaders who have the sharp expertise and first-hand experience needed to vet and identify true game-changers.
Contact us today for a consultation and see how we find the leaders you need for the future.
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