- Source link: https://bothsidesofthetable.com/high-functioning-vs-low-functioning-startup-boards-ae3ebe69cd9e
- TL;DR: This article lays out many good points that set highly functioning boards apart from low functioning ones
- How helpful?: 4/5
- Topic Tags:
- Relevant questions addressed:
- What are some qualities of low/high functioning Boards of Directors?
- Summary bullet points
- High functioning boards
- Tight-knit relationship between board members based on trust and respect
- Divide responsibilities and work
- Be able to collectively make tough decisions
- Try to build in casual time for a meal/drink to form a personal connection that will lead to more effective board governance
- “Every year I invited my largest investors to NYC to have an LPAC meeting (Limited Partner Advisory Committee — kind of like a board for a VC firm). We do lunch where everybody has a casual conversation followed by 6 hours of content and discussion. We then do a cocktail party so that everybody can have informal conversations (including LP to LP) and then we do a dinner in a private room at a restaurant. During the dinner I do half of it casually (chit chat with your neighbors) and half of it group “table topics” where we share ideas.”
- Low functioning boards
- Managers treat board meetings as an update session rather than a chance to engage the board in strategic discussions
- Low engagement from the board members
- Spending time checking email/social media
- Lots of members calling-in to the meeting
- Misalignment of incentives
- Different types of investors will have different goals for the company
- Not enough time/time used inefficiently/key issues aren’t debated
- Meetings not frequent enough
- Board members with no skin in the game/personal responsibility for outcomes
- Too many board members