from Business Knowledge Source.com 8/13 enhanced by Peter/CXO Wiz4.biz 8/14
Top 10 Factors. There are many factors that come into play when choosing a board of directors. Each of the factors should be considered individually when putting together a board. A poorly constructed and supported board of directors can be huge negative for a company while a successful board of directors can contribute hugely to the overall success of the company. Here are 10 factors to consider when choosing a board of directors for your Business.
1. Composition of the Board: In a typical Venture-Capital [VC]backed company, the board consists of members of the management team, including the CEO, representatives of VC investors & independent outside directors. This can vary dramatically as the needs, size & makeup of the company is considered. Also the member’s experiences are a key factor in how successful a board will be. While putting together the board, each member’s willingness must come into play. This willingness should be considered in terms of time & effort devoted and the willingness to be team players. These can be some of the most critical issues in your selection.
2. Avoid focusing on the Details, all the time !!! While some detail-oriented people are needed to balance a board. The majority of the board should be able to focus on the most significant issues. Flexibility in personality is key here.
3. Know your Business Plan. Most board members want management to formulate a reasonable business plan, take the board’s comments on the plan into account and execute the plan or give the board sufficient notice of — and commercially justifiable reasons for — deviations from the plan. Failure to do these things creates tension. Therefore, it is essential that the board of directors be made of people that can be worked “with”, not just worked for.
4. Establish Ground Rules. Not every decision by management needs board approval. The board should be made of members who understand the rules & their limitations and are willing to live by them.
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