Transcript

When you think about recruiting board members, have a wide lens. It’s very easy to think about your own direct network, people that you know, the investors that are investing in your company, and go one degree of separation from there. But there’s nothing wrong with going wider, especially if you’re an industry where you’re looking for a particular skill set that might be additive to your business. If you come back to this idea as an entrepreneur that part of your job is to always be collecting great people to be involved in your company, thinking about recruiting board members from the very early stages of your company is very powerful. When you’re meeting people, when you’re building your network, when you’re talking about your business, having a warm relationship with somebody that you want to recruit to the board is so much more powerful than that cold relationship where you’re just starting to get to know them for lots of reasons, both in terms of your efficacy in terms of recruiting them, but also your understanding of how they’re going to relate to you, the kind of work they’re going to do, and what the dynamics between you and them are going to be.

Some of the things that I think are really effective forms of diligence to do on board members that go well beyond just the classical reference checks are the following. First, spend time with them outside the office and outside a formal interview type session. Go out to dinner with them, you know, go for a walk with them. See how they relate to you as a human. Does their level of formality or lack of formality, their culture, fit with yours? Next, they’ll give you some references, and those references are the easy ones. But like most references, what you really want are the off-sheet references. You want the references that they’re not giving you. You want to find out what their reputation is, not in simple terms—are they good or bad? You want to talk to CEOs both in companies that have been successful and not about how that board member acted, not on a day-to-day basis, but in situations of stress and conflict, especially around transactions, especially around hard decisions. Are they quick to reach a decision, or are they wishy-washy and indecisive? Are they emotional about their response and emotional when people have a different point of view than them? Or, are they thoughtful and are they able to work through a situation? Understanding all of these things is hard to do unless you spend real time talking to people about the experiences that they had with the individuals, not just as board members, but also in functional work relationships. This is especially true for people who were previously senior executives, whether they’re investors or outside board members. A lot of investors who have previously been senior executives, CEOs, or entrepreneurs, bring that same style and personality to being a board member in a company they’ve invested in. So understanding what that is, and making sure that the functional engagement fits with what you’re looking for, but the cultural engagement also fits with what you’re looking for and the type of culture you’re trying to build around your company.

So if you’re thinking about adding someone to your board, and you’re not ready to make a commitment, you have a couple of different ways to try them out. I find the most effective way is to essentially invite them to a board meeting, have them meet the management team and spend time with the management team, have them spend time with the other investors, and see how they actually interact with everybody in the context of that board meeting. That’s not a one-shot thing. You can do that over a board meeting or two, or you can do that over a couple of months around the board meeting, as though you’re experimenting with the idea of having them on the board. In some cases, entrepreneurs like to try having that person on the advisory board first, and then potentially migrating them to the board of directors. I don’t see that very often, and I certainly don’t see that very often as a powerful way to do it because the commitment level between an advisory board and a board of directors is so different. My suggestion is to use this two-way try approach. Let the potential board member get to know you and decide whether they want to be a board member or not with your company. And vice versa. Get to know them by actively engaging them in the board and getting to know them through that.