What Makes A Great Board Member_ (You Really Need To Get This Right)

What Makes A Great Board Member_ (You Really Need To Get This Right)

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11/3/2016 What Makes A Great Board Member? (You Really Need To Get This Right) 1/34 Tech JUN 19, 2014 @ 11:22 AM 19,739 VIEWS Bryan Stolle , CONTRIBUTOR I write about building businesses. FULL BIO Opinions expressed by Forbes Contributors are their own. What Makes A Great Board Member? (You Really Need To Get This Right) An entrepreneur recently asked me, “What makes a great board member?” as she is in the process of putting together her board. About the same time, a fellow VC lamented about a miserable board meeting they had just attended, and why it was so bad. The questions are two sides of the same coin. A great board is the result of having great board members. Bad board meetings are the result of ineffective or unqualified board members. So what does make a great board member? 1. Great Judgment Judgment is a must. In many ways, it is THE job of a board member. A board member with solid judgment keeps you out of trouble and helps you navigate difficult situations. They can help you make the right decision about strategy options, hiring and firing, financings,
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11/3/2016 What Makes A Great Board Member? (You Really Need To Get This Right) 2/34 M&A opportunities, legal issues, organizational design questions, etc. If you have a board member who doesn’t have the experience and gravitas essential to good judgment, you are doing yourself, your company, and your shareholders a serious disservice. Creating a Board of Directors composed of great board members is vital to a company’s success. 2. Relevant Context A great board member needs to have as much relevant context as possible in order to offer actionable and on­point advice. There are four key areas of relevancy: Industry – While someone can be a great board member and not be from the same industry in which the company operates (sometimes it’s not a bad idea to have one board member who is from outside your industry, for perspective), it helps if most board members do have industry context in some form (customer, supplier, academic, etc.). It’s too hard to train a whole board on all the nuances of an industry, when decisions have to be made with alacrity using the best insights possible. Business Model – There are many subtleties in any given business model. These nuances can greatly impact strategy, accounting/finance, cash flows, etc. For example, a board member who understands consumer sales may not be able to offer great advice or help make the
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11/3/2016 What Makes A Great Board Member? (You Really Need To Get This Right) 3/34 Trade indices 24 hours a day.
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