In the stage between startup and scaleup a supervisory board is sometimes seen as a ‘limiting’ factor, delaying the company in reaching its goals. Have you ever thought of a supervisory board as one of the success factors of a company in this early stage?
Traditionally corporate governance focuses on the legal relationship between managers and shareholders. Nowadays there is much more to get out of it. The role of a supervisory board has grown beyond mandated process requirements, to carry a more substantive meaning for the creation of corporate value. At many leading companies today, the board and the executive directors form a real team on strategy issues. How do you select the right board member for your company?
Here are 5 considerations that may help scaleup teams and investors in choosing the right board:
- Mindset vs. skillset
There is a clear distinction between the two. A skillset could be very much appreciated and tell you the skills and expertise that a board member will bring into your team as an advisor or sparring partner. Industry veterans and -experts are often selected for a board and it could be very valuable to have someone who has in-depth knowledge and knows your market at least as good as you do.
Mindset is about your way of thinking, your ability to learn, and the way you see the world around you. Successful board members are no longer defined by what they know, but rather by how they work. Are they challenging, eager to learn and open for growth? Try to look back on the breakthrough insights, learnings and pivots in your personal or professional life. Were they triggered by someone who prescribed you exactly what to do or by a person who asked you exactly the right questions?
A scaleup team needs to be challenged, mirrored and to be empowered to solve issues to reach its highest performance. By choosing board members by their (growth) mindset you will bring reflection into your company that will eventually make you stronger.
- Think of it as a good marriage.
Even though the relationship between board members and CEO’s is a professional one, it is important that you commit to working together in good times and bad times. Think of it like a professional marriage. Is this person as passionate about your company as you are? Do they truly believe in the potential of your product? This joint commitment justifies a critical review of the persons you bring onto your board. Especially when the going gets tough, the board needs to work effectively through difficult circumstances.
- The board chair as facilitator.
The vast majority of board chairs are occupied by former CEO’s and their experience could make their involvement very valuable. But upon becoming board chairs, research by INSEAD points out that the very same competencies and personal traits that had made them effective CEOs were of little help—and even counterproductive—in a chair’s work. Ask yourself the question: is this person motivated by copying his or her own learnings into your company or by using their learnings to empower you as a management team to reach your own company goals?. “To be effective, chairs must recognize that they are not commanders but facilitators. Their role is to create the conditions under which the directors can have productive group discussions.”
- Diversity in experience and background.
Diversity goes far beyond gender or race. Look for unique individuals who bring different talents and characteristics to the table. Search for those who have held positions that can help you look at various aspects of your business in a clearer light.
Having the right mix of members in a board will always be essential. But in order for the board and its members to reach their full potential they must understand the behavior and personality traits needed to excel in the complex role. Success comes from the creative tension to assemble a group of people who think, feel and react in different ways.
- Avoid 1-way communicators.
As Dorine Wekking mentioned during her session called ‘It is not about you’ during the Scaleup Board program it is not about the ego of the board member. Non-executive board members will have the most effective contribution to help the executives excel. And that requires two way communication. People who use directional power of speech and instructions to influence strategic choices of startups are all over the place. Scaleup companies can become very confused and insecure to hear ‘go left, go right, go up, go down’ in one session with their mentors and advisors. As this works counterproductive rather than inspiring, it is crucial that curiosity and mutuality will be brought back to the table. People asking the right questions can make a true impact for your company. And so do board members with a sharp sense of curiosity.
 The Art of Scaling (Version 3, 2020) – ScaleUpNation
 Lead and disrupt (2016) – C.A. O’Reilly III and M.L. Tushman
 Presentation: Ambidextrous Leadership (March 11, 2022) – A. Eggenkamp  Presentation: It’s not about you (February 10, 2022) – D. Wekking
*Image by jcomp on Freepik
About Adinda Woelderink
Investment Manager at ROM Utrecht Region
Adinda is an Investment Manager at the ROM Utrecht Region. She builds and invests in innovative companies in Life Sciences, Digital Health and MedTech that are located in Utrecht area. She holds a Masters degree (MSc) in Innovation Sciences, Medical Biotechnology and has been working for over 18 years in different positions at the intersection of Life Sciences, Entrepreneurship, Innovation and Venture Capital. Within the ROM Utrecht Region Investment team she was responsible for several investment rounds and serves as shareholder representative/observer to the Supervisory Boards of portfolio companies. She believes that startups and scaleups are the best vehicles for creating large societal impact. Beside the mountains and nature, she prefers to be in multidisciplinary environments where new ideas and breakthrough science are growing towards innovative and succesful products
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