Any company must have a board of directors and a chairman who leads the board. It is quite common practice, at least in Finland, that especially an inexperienced team will select the chairman among their advisers and business angels. The selection of the board and especially its chairman has far reaching implications. Don’t take it lightly.
Running and leading a startup’s board is a whole different ball game as compared to the board work done in more mature companies with revenues and established business models. The work in a startup’s board should be much more intense and requires practical product-level detailed tactical understanding on what a startup is up to. This is rarely the case in larger companies. It is extremely difficult for even the most prominent professional managers (or board professionals) to successfully cross over from a large company to a startup setting. And be useful and acknowledge and apply the startup sensibility. This fact alone makes most big name prominent business leaders not only useless but downright dangerous implementing their large company experiences to a vastly different setting. There, however, are few exceptions who can handle both. In brief, beware of the so called board professionals and figure out if they understand what kind of a beast a fast growing tech startup is.
So, what would then be a good high level list of competence requirements for a startup’s chairman of the board? Here is my list for the must have skills:
- In-depth understanding and vast practical experience on how the entrepreneurial process works by transforming mere high tech ideas into commercial products. Deep understanding and experience across all operational functions of a company and how they play together.
- Strategy and venture funding knowledge and practical experience are vital.
- Willing and able to use enough time. The right attitude. Engaged from his heart.
- Good understanding of corporate governance and legal in a startup context. Practical experience in managing change including hiring and firing employees, CEOs etc.
- Understanding of the importance of a great startup culture and how to build it.
- No fear attitude.
- High integrity.
The following skills are nice to have:
- Domain knowledge. A person with a fast brain and clock speed can learn any domain just by asking a set of questions and paying attention to the details. Chairman, as well as any other member of the board, must understand the domain but they can learn it on the job.
- Networks. While a relevant network can help a lot, the chairman’s key value add should be elsewhere.
- Celebrity status. Pick always competence over prominence. It, however, doesn’t do any harm if a chairman has a good reputation and is known as long as he is not a mere figurehead.
Being a startup’s chairman is a really tough and mostly underpaid job. A chairman must always optimize what is good for the company, not for an individual stakeholder be that an investor or founder.
The best thing about being a chairman in a startup is the fact that it will spice your life and bring a lot of excitement and takes away all your free-time problems if you so wish. 🙂
I would love to hear out your thoughts on this post. Please keep the comments coming. The best place to have the discussion is the Tough Love Angel’s Facebook page.