High Functioning vs. Low Functioning Startup Boards by Mark Suster

  • 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