New Voices in the Boardroom: A Guide for Expanding Your Board Post-Fundraise
Practical tips for getting new board members up to speed
DEAR STAGE 2: We just raised our A round and are going from a board of 3 with 2 observers to a board of 5 with 3 observers. Right out of the gates, our new investor is joining the board and then we will run a search for an independent. What advice do you have for making this a smooth transition? ~WELCOMING A NEW BOARD MEMBER
DEAR WELCOMING NEW BOARD MEMBER: Congrats on the round, but get ready… you’ve got a lot of change happening at once!
Transitioning from a small board that has been working together for a while to a larger structure can be a significant shift - new reporting requirements, new personalities to manage, and a lot more voices in the room. As a partner at Stage 2 Capital, I've been in the position of an investor joining a new board. For this article, however, I wanted to bring in additional perspectives from CEOs and Independent Board Members. Here’s a combined perspective from Travis Kimmel (multi-time founder/CEO and board member at AeroCloud), Carol Meyers (former CMO at Rapid7 with board experience at Markforged, Rewind, Crunchr, and many more!) and Zach Garippa (Co-Founder and CEO of Order) on making this transition seamless and productive.
Travis Kimmel suggests a practical method for vetting potential Independent Board Members: have them attend a few meetings as an observer first.
Recruiting the Independent Board Member
When it comes to recruiting your Independent, Carol Meyers emphasizes the importance of taking a strategic approach. Start by considering the skills, experience, and characteristics that would add the most value to your board (we did a deep dive on this last year - check out some common Independent profiles here). Engage with each of your investors to gain their perspectives and share your own. Achieving alignment on what you’re looking for will streamline the search process and ensure you find a candidate who is not only highly qualified but also a good cultural fit.
Travis Kimmel suggests a practical method for vetting potential Independent Board Members: have them attend a few meetings as an observer first. This allows you to gauge their understanding of your company and the dynamics of your board. After these meetings, engage them in discussions to get their views and insights. This approach not only assesses their fit but also gives them a chance to better understand your company before committing. You don’t have to make this decision overnight and can take time to get to know the candidate with real-world exposure before diving into a long-term agreement.
Onboarding New Board Members
Onboarding your new board members effectively is crucial for building a cohesive and productive board, and it comes down to three things.
Materials
1:1 meetings
Expectation setting
Carol points out that your new Investor Board Member will likely require less onboarding due to the extensive due diligence they conducted during the investment process. However, it’s still beneficial to ask them to share the insights and findings from their due diligence. Understanding what excited them most about your company and ensuring aligned expectations for future performance will set a strong foundation for your collaboration.
For the new Independent Board Member, Carol advises sharing materials similar to those provided to new hires. This could include overviews of your mission, vision, values, market positioning, Ideal Customer Profile (ICP), sales pitch deck, your recent investment pitch deck and anything else you deem helpful. You might even ask your new Investor to share a version of their investment memo or summary of diligence!
Zach Garippa stresses the importance of oversharing and over-communicating early. Send them all relevant information, have one-on-one meetings, and provide recaps of previous board meetings for important context (ideally all materials from at least the last two board meetings). Make it easy for them to catch up and feel integrated into the board’s activities! This thorough approach ensures they quickly get up to speed and can contribute effectively.
The Independent role is most effective when there is a shared background or understanding - building that personal relationship takes time and you need to make that investment early to get the most out of the relationship.
Building Trust and Transparency
Travis highlights the importance of rapport between the CEO and the Independent Board Member. The Independent role is most effective when there is a shared background or understanding - building that personal relationship takes time and you need to make that investment early to get the most out of the relationship.
Carol emphasizes the importance of trust and transparency among the Board and leadership team. Encourage your new Independent Board Member to meet with your investors, other Board Members, and key executives if they haven’t already. These meetings help them gain deeper insights into your business and build the necessary relationships. The foundation of trust and transparency is critical for a productive and harmonious board.
To get your independent board member contributing from the start, Zach offers valuable advice. He suggests asking new board members about their experiences with both outstanding and subpar board meetings. Learning from these anecdotes and specific examples can help you identify best practices to adopt and pitfalls to avoid.
Managing the Board
Establishing an effective operating rhythm is crucial. Zach recommends having a specific conversation about this with each new Board Member. Discuss their preferences for receiving materials and whether they like prep calls before board meetings. Critically, you should make it clear what your preferences are as well and what you are trying to get out of a board meeting. For example, you might ask your Board to review the deck and share notes/questions 48 hours before the meeting and skip a slide by slide review during the meeting with the assumption they are up to speed. Understanding each other's working styles will facilitate smoother interactions across the board.
Travis agreed and pointed out the need to set clear expectations on everyone’s role in the boardroom - particularly observers. As the board room grows there is not always space for every topic, or to hear everyone’s views on all subjects. Getting ahead of this with observers ensures that discussions remain focused and that the board can operate without distractions. Observers can provide feedback outside of meetings, preserving the integrity and productivity of board discussions.
Exciting times as you expand your board and enter this next stage of growth. Good luck onboarding these new members of your Board.
Until next week!