Guidelines for director readiness and effective board engagement
The Search Fund community is thriving yet facing acute growing pains. At the 2025 Stanford Graduate School of Business Search Fund Conference, both CEOs and investors voiced concern that board effectiveness and support seem to be declining. CEOs are seeking more coaching and guidance, while many experienced directors are overstretched and newer board members often lack comprehensive board training. The result has been perceived weakening of trust, collaboration, and high performance —values that have historically defined the ecosystem. The Board Development Program (BDP) was launched to address this gap, creating resources to strengthen director quality and board functionality. This “Toolkit” offers practical guidance for new or existing boards. Thank you to the BDP leaders Sara Rosenthal, Rob LeBlanc & Chris Hendriksen for their leadership on this project.
I. FORMING – Building the Right Board
The early formation of the board -ideally before an acquisition- is critical. CEOs and investors must intentionally construct boards grounded in trust, respect, and complementary skills.
1. Who Should Be on the Board
An effective board blends four archetypes:
- Operator: an experienced small-business or Search Fund CEO who understands daily operaitional realities and can advise the CEO on typical operating challenges.
- Investor: brings financial insight, capital allocation skills, and pattern recognition.
- Expert: adds technical or industry-specific knowledge (used sparingly or as an advisor).
- Local: provides regional context and networks, especially lor international acquisitions
Boards typically consist of 3 to 5 members (the CEO(s), 1-2 operators, 1-2 investors, possibly a local or expert). Notably. some people can fill more than one role. Not all seats need to be filled on “Day 1,” and CEOs should establish term limits to allow future adjustments to the board as the company matures.
2. Board Roles and Composition
High-performing boards intentionally fill specific functional roles:
- Lead Director: coordinates board activities and CEO feedback; can emerge informally but should be designated and clearly communicated among the group.
- Board Veteran: an experienced director with deep pattern recognition and mentoring ability.
- Emerging Director: a less experienced director learning under the veteran’s guidance (ideally leveraging the BDP’s existing mentorship framework)
- Functional Expert(s): provide oversight in areas like finance, operations, product, or sales.
- Runner: has capacity to handle administrative follow-through and coordination.
- Confident: serves as a trusted sounding board who offers personal/emotional support to the CEO.
Directors often fill multiple roles. Note that investors/advisors can and should provide topic-specific and/or deeply valuable complementary support without being a director.
II. NORMING – Setting Expectations and Working Effectively
Once formed, boards must align early on responsibilities, behaviors, and operating norms.
1. Responsibilities
The board’s primary duties include:
- Supporting and evaluating the CEO
- Approving major strategic and capital allocation decisions
- Maintaining financial oversight and risk management
- Helping the CEO set strategy, priorities, and KPIs
- Engaging shareholders and managing compliance
- Representing the broader shareholder group
- Reviewing its own performance
Directors act as coaches, not players: they advise and hold the CEO accountable but do not manage day-to-day operations.
2. Behaviors and Culture
High-performing boards model the Search Fund community’s values of humility, integrity, transparency, empathy, and candor. Directors should:
- Serve the company and CEO first
- Be prepared, engaged, and available
- Encourage open discussion and constructive disagreement
- Be an active listener and show/teach whenever possible
- Offer feedback with “direct kindness” and accountability
CEOs, in turn, must over-communicate —especially around bad news— to build and maintain trust.
3. Time Commitment and Cadence
Being a director is a significant time commitment (typically 80-120 hours per year) Minimum expectations include:
- Quarterly formal meetings (with at least two in-person annually, ideally on-site post-acquisition; higher frequency is better, if directors are able to coordinate)
- In-depth review of materials and content shared by CEO with pre/post-meeting calls as needed
- Timely follow-up and follow-through on specific requests/needs of CEO (e.g, introductions to key resources, guidance on sales commission plan, etc.)
- Monthly or biweekly check-ins with the CEO
- Functional subcommittee sessions and occasional ad hoc meetings
The lead director or confidant should maintain regular, informal contact with the CEO (recommended weekly or biweekly, particularly early on in the CEO’s tenure).
4. Meeting Protocols and Agendas
High-quality preparation drives high-quality discussion. Boards should:
- Request that the CEO distribute pre-reading at least one week in advance.
- Submit written feedback or questions beforehand.
- Structure agenda to focus on the most important topics (including administrative items, CEO updates, strategy review, key decisions, financials, and approvals).
- Conclude with Non-Executive Director (NED) sessions to discuss CEO performance privately, with feedback summarized and shared with the CEO.
- Hold informal dinners, breakfasts or activities around board meetings to provide important social time that helps strengthen relationships and trust between board members (these can also be a forum for productive organic discussion about the business).
5. Board Materials
Core board packs should include:
- Agenda and objectives (including time allocated for key topics)
- Executive summary and prior minutes, including matters arising from prior meetings
- KPI dashboard and financials (three financial statements against budget and prior year)
- Organizational chart, summary of original transaction. and current cap table
- Summary of any critical risks, regulations, legal actions, or conflicts (varies by region)
- Updates on strategic initiatives and pending decisions
- Clear requests for any approvals or votes that are required
Materials should align with management reporting. Minimize time spent creating board-only materials.
6. Feedback, Accountability, and Term Limits
Effective boards institutionalize feedback loops and renewal processes by:
- Conducting quarterly CEO feedback via the lead director and an annual formal performance review
- Building relationships with key executives while respecting reporting lines
- Providing quarterly investor updates using summarized board materials
- Reviewing board performance annually and refresh membership as business needs evolve
- Facilitating annual investor group calls to enhance transparency and resource sharing
III. CONCLUSION
Strong board practices are essential to sustaining the Search Fund model’s success. While these principles may seem simple, consistent execution requires intentional effort. The BDP’s framework —emphasizing structure, trust, preparation, and feedback— aims to revitalize the ecosystem’s cultural foundations and elevate both performance and experience for CEOs and directors alike.
Acknowledgements: This note would not have been possible without broad-based support from the Search Fund community. In particular, the BDP thanks the initial Veteran/Emerging Director pilot cohort group, including Mitch Cohen and Sarah Rowell, Doug Tudor and Ryan Turk, Rich Augustyn and Brian Williams, Gerald Risk and Laura Franklin, Kent Weaver and Promise Okeke, and Jim Edmunds and Billy Bennett. In addition, the BDP is grateful to other Search Fund community veterans, including A.J. Wasserstein, Dave Dodson, Jamie Turner, Jeff Stevens, and Will Thorndike. as well as Pedro Teixeira Duarte, MBA candidate at the Stanford Graduate School of Business, who contributed meaningfully to this document.
A one-page checklist (Exhibit 1) accompanies this note to help new and existing boards apply these practices immediately.
