Why your startup needs a board of directors

A business meeting in session. [Getty Images] To grow big and maintain a stable market share, it is important to engage a board of directors. As an entrepreneur, the founder's syndrome struggle is always there. You do not want to hand over management and decision-making to a board of directors, you fear that by their presence, you are eclipsed from the running of your business. But quite, to the contrary, the board of directors is there to help you navigate crisis and grow big. The board helps you align your company purpose, people, and other resources to solve a global problem. Strategic level Since the board operates at a strategic level, it helps you define the vision and mission of your organisation, which is basically why the business exists. This needs to be very clear to you for brand alignment. You want to create products that delight your customers and dissolve customer pain. Every three to five years, the board helps you develop your organisation's strategic plan, which is a living document that outlines the pillars of your business. This document guides the operations and expenditures of your organisation. For every cent that you spend on your business, you need to ensure it's aligned with the business strategic pillar. As an entrepreneur, you need to move from the input-output expenses model to the impact and outcomes delivery model. Ensuring strategic alignment becomes vital for everyday business operations. Interpret challenges The board also helps you to interpret challenges and the operating environment. It's the body that is charged with fiduciary and oversight responsibilities. It helps you scan the threats that exist and follow up on compliance issues and help you put your business on the map. As the board is different from management, it provides the required checks and balances to ensure the business remains viable. A strong relationship needs to be nurtured between the board and management since the board meets every quarter. The management needs to keep a good flow of information - from management to the board. Making decisions It's advisable to have management sit on various committees of the board to provide inside perspective and information that is useful when making decisions. One important parameter to ensure the business continues to grow and attract various customers is to ensure there is a clear distinction when it comes to responsibilities. It should be clear where board responsibility starts and stops. You do not want a board that becomes very operational and losses the strategic standpoint. As the saying goes, "nose in fingers out", that is how your board should operate. The main work of the board is to anticipate the future, understand what kind of risks exist and how to close those risks and navigate any crisis that may happen. Uncertainty rules many businesses and the work of the board is to make uncertain certain and help you rebuild your business after a crisis. Keeping a risk register under the purview of the board is important in securing the future. Every quarter, the board's committee on risk reviews the current and future operating environment and makes recommendations to the board. The board then adopts strategies that are geared towards averting risk and positioning the business for the future. With regards to competition, the work of the board is to help you and your business develop your competitive advantage, what differentiation do you want to undertake for your product and services so that you remain on top of your competition? The board can help move your business to a blue ocean where your focus is on developing a category of one product where there is no competition, and you have the full market share. To do this, you need to define your moonshot and take bold moves to achieve them. Together with your board, you define and adopt methodologies in the exponential growth path, where you're multiplying your business, not two times but ten times. This is only possible if you have done the first step we talked about, which is strategic alignment and solving global problems thus your market share is global. Collecting customer feedback becomes key as part of product and service design. Your goal becomes delighting customers by solving their most persistent pain. The functioning of the board is that of making decisions, whether by majority or by consensus. As a businessman, you want to be sure your board is helping you make the decisions that are required to propel the business forward. For board cohesion and working relationship, the best decisions can be made by consensus, but this is difficult to achieve, especially with public sector boards. The relationship between the CEO and the board chair is important in guiding the rest of the team. Enough chemistry needs to exist without jeopardising the independence of the board. Individual assessments When recruiting for a board position, you want to make sure that all constituents and stakeholders are represented. You also need to ensure there is diversity in the board including skills, gender and geopolitics. To ensure the board is well functioning, there should be annual board evaluations and also individual assessments. This will ensure that board members are also aligned with the organisation's goals and vision, hence no surprises when it comes to making decisions. One of the major functions of the board is to ensure there is learning and growth within the organisation. Lifelong learning becomes the mantra of the organisation. Correcting mistakes, closing audit and evaluation observations and full oversight becomes critical. An organisation that learns from its shortcoming every single day and takes action every day however small is on a path to being extraordinary. Choose growth today and recruit your first board of directors. The writer is a senior budget officer at the African Development Bank and the author of Unlock Your Body Budget.

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