The best thing about private boards is that you can keep them smallâthree to five board members is best. You can just have an investor, an insider, and an outsider with a specific expertise you really need.
But you also have to remember that even with a small board, the meetingâs still not small. The room has twice as many people as youâd expect. In addition to the CEO and board members thereâs a lawyer, formal observers with some stake in the company, and informal attendees, like members of your exec team.
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But be carefulâeven if you have a cofounder, there can only be one CEO. And if you pile on the cofounders, youâre asking for trouble. Having two founders works well. Three can work sometimes. Iâve never seen it work with more.
I remember one startup we worked with that had four cofounders. Every decision was made by consensus, which meant every decision took forever. Theyâd never started a company before, so even the most basic questions were endlessly debatedâhiring, product changes, who to take money from, and how to structure the agreement. If they couldnât agree they would hem and haw, trying to be nice, trying to be reasonable, watering down their opinions until the company fell behind the competition, ran out of money, and the board had to swoop in, remove some founders, and change the whole team around.
Even the best CEO cannot stand alone, untouchable, unchallengeable, accountable to no one. Everyone needs to report to someone, even if itâs a two-person board that you meet with for an hour every few months.
There always needs to be some kind of pressure-release valve. There always needs to be someone who can shake their head and give it to you straight.
And if you do it right, you should never be a victim of your board. As CEO, you help to shape it. Boards always change based on the CEOâthe board under Steve Jobs was different from the board under Tim Cook. Boards complement a CEOâs strengths and no two CEOs are alike.
You want board members who are truly, deeply excited by what youâre making. Who canât wait to hear what youâve been up to. Who arenât just there for the meetings but are with you day in and day out, helping you, finding opportunities for you to succeed. You want a board that loves your company. And that your company loves back.
Once youâre attending board meetings, you can strengthen your relationship with the group if you donât do too much talking. Instead, prompt discussion by asking directors plenty of questions. The boardroom is one room where the temptation to prove youâre the smartest person in the room can be especially strong but especially off-putting.
Public boards typically limit their interactions with CEOs and other company leaders to formal scheduled meetings. PE boards eschew that approach in an effort to stay deeply connected with company decisions. Courtney della Cava, global head of portfolio talent and organizational performance at Blackstone, shared, âWe encourage our board members to interact regularly with their respective business and functional leads as well as the CEO and other board members.â She emphasized that, whereas public company CEOs tend to think of board relations as about managing the board, in the PE model, that approach wonât work. A partnership mentality is best in the public context, also, but under PE ownership, its imperative. PE firm boards arenât interested in slide presentations or any of the theater of public board meetings.
In recent years, to further enhance the support the board can provide, some PE firms have been appointing a select number of independent directors to work directly with senior executives in addition to the CEO.