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As a SF preparing to acquire and manage a company, selecting the best board members is crucial for driving the growth and success of the business. It involves a strategic approach to choosing the best professionals with diverse skills, experience, and perspectives who can effectively govern the organization and provide valuable insights. Here are 5 pieces of advice we gathered from experienced searchers:
1/ Understand the company’s needs: Before selecting board members, it’s essential to deeply understand the company’s industry, market position, growth opportunities, challenges, and strategic goals. It’s not the same challenge if you want to expand into new markets, launch new products or services, optimize operations, implement innovative technologies, or start a build-up process, for example. That’s why it is so important to identify the specific expertise and experience required to address these factors effectively.
2/ Assess skills and expertise and seek industry experience: Look for individuals with a track record of success in relevant areas such as finance, operations, marketing, sales, legal, technology proficiency, and corporate governance. Prioritize board members with deep industry knowledge. These veterans can provide valuable insights, connections, and best practices.
3/ Consider diversity and fit with company culture: Aim for diversity in all its forms: gender (quite hard in the SF industry where 99% of the players are male), ethnicity, age, professional background, industry experience, geographic location, and perspectives. One common error is to include only investors from your cap-table, thinking that mixing private investors, family offices, and institutional investors is sufficient. A diverse board brings different viewpoints and insights, which can lead to more informed decision-making and innovative solutions. Recruit strategically and consider networking within your industry, professional organizations, or utilizing executive search firms if needed. Also, leverage your investor’s networks for referrals. And don’t forget to consider the cultural fit with the company’s values, mission, or corporate culture.
4/ Conduct interviews and due diligence: Assess the track record, ethical conduct, and reputation of potential board members in their respective fields. Check their qualifications, motivations, and commitment. You are lucky, the SF industry is deeply collaborative, so conduct thorough due diligence and ask your peers!
5/ Establish clear expectations and board dynamics: Generally, it might seem easy to align interests as most of your board members are shareholders or referred by them, but you will discover that in reality, they can differ relating to the exit strategy or horizon time. Clearly communicate the roles, responsibilities, and expectations of board members, including their involvement in strategic decision-making, governance oversight, and support for management initiatives. See who is really willing to invest their time, resources, and networks to support the company’s growth objectives, and who can collaborate constructively, challenge assumptions, and bring fresh perspectives without causing discord.
Don’t forget to encourage engagement and constructive feedback. By following these pieces of advice gathered from past searchers, you can assemble a board of directors that is well-equipped to guide and support your new organization’s success.
