Here’s the deal: The term “growth stage” encompasses multiple phases of a company’s journey, and no two growth stage companies are exactly alike. What’s more, the way a company looks today — and the support it needs to scale — is inevitably different from the way it looked earlier (or will look later) in its journey. This is why it is crucial for leaders of growth stage companies to ensure their boards fit their unique, phase-specific needs.
Such was the foundation for my roundtable. Edison CEOs gathered virtually and spoke candidly about their governance experiences: what has worked and what has not, how to derive the greatest value from board members (both individually, and as a whole), and how to truly leverage their boards as the “strategic weapons” that we at Edison constantly preach they should be. The discussion was robust; while it would be impossible to capture the full extent of it here, we’d be remiss not to share a few key takeaways. Here are three ways growth stage leaders can curate boards that fit the bill:
1. Prioritize continuous improvement.
“If you’re not doing continual improvement, you’re leaving value on the table.”
Constantly look for ways to refine your board. The same way company leaders seek to improve the talent within their organizations and executive teams, they should be aiming to better their board health, dynamics, and in some cases, members. This requires CEOs to review — either formally or informally — the efficacy of each board member on a regular basis. Are they actively engaged? Are they adding the value they were expected to? If not, it may be time to set new expectations and/or part with ineffective members.
Implement annual board health evaluations, or even consider term limits for board seats. This may be easier to deploy for independent seats than for financial investor seats. At a minimum, it’s worth using an annual review period, or other compelling events (such as a new round) to set or reset expectations on good behaviors and outcomes. Leveraging your board chairperson is critical to enabling this ‘continuous improvement’ reality.
2. Be selective with independent seats.
Curating the board of your dreams can be tricky when there are certain stakeholders that must be represented. Still, beyond your company representatives and your investors, independent board seats are opportunities to match capabilities and talents with your phase-specific needs. CEOs should be particularly discerning when filling these spots, focusing on exactly what is needed for the next season of growth and courting (yes, courting) independents with relevant subject matter expertise. In my opinion, smaller boards tend to be better for growth stage companies. I regularly encourage CEOs to add an extra seat if their board is missing a necessary point of view.
If you’re looking to fill an independent board seat, check out the Edison Director Network.
3. Keep meetings forward-facing.
Many boards make the mistake of spending too much time looking back on previous quarters. Boards drive the most value when they focus on forward-facing, strategically critical issues. While it may not initially seem like a way to ensure your board is fit to purpose, remaining future-oriented in board meetings enables you to determine if you have the right board members for where you’re going, not where you’ve been. When all eyes are set on what’s ahead, CEOs can be more intentional about leveraging the unique strengths, connections, and other resources within their boards that will help catapult their companies to the next level. Should your quarterly cadence not be enough, a ‘fifth’ meeting that is ONLY strategic in nature – spending concerted time on ecosystem, competition and macro dynamics – may be the key to improving your operating plans.
If you’re looking for support ensuring your board is fit to your company’s needs, the Edge is here to help. Reach out to us at edge@edisonpartners.com.