As a young and first-time chief executive, I once had the privilege of a private meeting with a world-renowned chief executive of a top tier multinational in his Silicon Valley office. I asked: what is your most difficult challenge? A few seconds, then the firm reply: “Hiding the terror in my eyes.”
His response matched the internal debate in my head. Almost every hour of every day, and sometimes at 3am, my worries both big and small required meditative curation. I had often wondered should all my frequent concerns be shared with my board of directors, and so seek their advice.
The wise counsel to suppress any terror implied that to do so would be neither fair nor reasonable. Instead, I should remain calm and confident, laying out scenarios to my board honestly but accurately, and keep any teasing demons firmly to the back recesses of my mind.
My board had told me: “No surprises!” I should always flag potential issues, as well as potential good news, so that the board had an opportunity to reflect and offer advice. Nevertheless, the balance between hiding the terror and being transparent meant that not every worry, whether big or small, could be shared with board colleagues.
'Keep them simple, stupid' was yet another mantra, and one which especially applies to board minutes
It is not unusual for the board of a start-up to have co-founders and/or some senior managers as board directors, and so it was in my own case. This creates reassurance and transparency for the non-executive directors since they can solicit the views of other members of the team beyond the chief executive. But it also has the potential for conflict, as concerns consciously not shared by the chief executive with the board may nevertheless be raised by a team member.
Having now served on many boards I am somewhat neutral on whether co-founders and senior managers should be directors alongside the chief executive. If they are not a director, then certainly co-founders and senior members can still participate in meetings by invitation of the board.
However, if there are executives at the board table beside the chief executive, the non-executive directors should have a scheduled private session with the chief executive as an adjunct to every board meeting. Sensitive issues, including the performance of the chief executive or of a senior manager, can then be discussed and advice given without undermining the chief executive in front of the management team.
Keep it small, stupid
If co-founders and senior managers are pressing to join the board, then how big should the board of a start-up be? “Keep it small, stupid” was another seasoned chief executive’s advice to me. My experience favours small boards, maybe between five and seven people.
While major investors usually insist on a board seat, it is prudent to augment their experiences and skills with further non-executive directors who have relevant industry and domain knowledge. One of my own directors told me we needed people who had “seen the movie before” and could thus give perspective in otherwise novel situations.
“Keep them simple, stupid” was yet another mantra, and one which especially applies to board minutes. For a start-up, it is important to realise that these documents may well be subject to detailed scrutiny and assessment in the due diligence carried out by a new lead investor in a subsequent funding round. The evidence of what decisions were made at board level, what commitments were made by the chief executive and management team, and then how the company subsequently performed, may all directly influence valuation and ability to close future funding.
Set agendas for every board can quickly deteriorate into rote meetings, with non-executives nodding sagely as management monotonously reports. To engage my board I liked to have an “issue of the day” to which we could devote an hour or so, and have each director offer an analysis. Flagged in advance, this became a piece of “board homework” and was always insightful since each director usually had a different perspective on the company.
Perhaps the most valuable advice was “tell them what you’re going to do; tell them while you’re doing it; and tell them when you’ve done it”. This mantra of consistency also reminded my board about what exactly we were trying to do. I now like to encourage a start-up chief executive to remind me and my fellow board members about the business objectives for the coming period up to the next major landmark for the company, and to provide a high level indication of how well – or otherwise – we are tracking towards those goals. Then, as the board meeting progresses, each agenda item and discussion has the context and backdrop of how it is helping move the company towards our next waypoint.
Being chief executive can be a lonely experience, sandwiched between the board and the rest of the management team, observed both for what you do and what you don’t do. Perspective and detail, calm with business passion, confident yet heedful all are the yin and yang of the start-up chief.
