Building board of directors and managing is a key task for a startup CEO and founding team. The management of the business by the board is a reflection to the investors.
Thus, a well managed business by the board will add value to the business and benefit from the direct mentor-ship of its investors
Need Of Having Board Of Directors And What To Do
There is a great need in having board of directors since every company is required by the law to have a board of directors, thus every company must have a board in place. To create a board, you have to hire a lawyer experienced in board setup.
What The Board Does
The board is responsible for the overall direction of the company, making major decisions, such as hiring and firing senior management, approving a budget and keeping the company financed through equity investments and debt financing.
When To Start A Board
When you start a company, it is every important to have the board of directors. In most startups, the founder in most cases appoints himself or herself to the board. Thereafter, others get added to the board as the company grows.
Who Is On The Board And Why It Matters
According to Firstround, the decisions on who is made a member on the board is critical. This is because the board will be responsible in making the critical decisions for the company. These decisions are to be made by people who are knowledgeable about the company and the industry in which it operates.
Board Meetings
Meetings depend on the stage of the company and the needs of management. For startup boards, they meet once a quarter, to review the prior quarter's results, such meetings last about three hours. Early-stage companies hold more frequent informal board meetings, such as meetings done by phone
Payment To Board Members
Payment to board members varies by stage, identity of the board member and also between companies reports Techcrunch. Normally, board members who are representatives of funds that are invested in the company do not get paid to serve on the board. Independent board members get compensated for their time and services for early-stage companies.
Board members provide connections with other helpful companies, individuals and resources, as well as offer overall advice and guidance. Generally, for any company to attain its goals and ensure profit, having the right board members is key.
