Independent Board Members
WRITTEN BY: UPSIDE PARTNERSHIP
Why Add Independent Board Members?
Mark Suster outlines the key information about independent board members in a post he wrote in 2019. His top reasons why a founder may want to add an independent member to their board:
- 01 - Neutrality
“Choosing independent directors is a way that founders can create independence from investors getting to make all of the most important decisions regarding the company’s future and vice versa.”
- 02 - Expertise
Independent board members “should provide operating experience that is relevant to your business that will be represented on your board.”
- 03 - Mentorship
Independent board members “are usually very experienced operators that can mentor the founding team.”
Selecting Independent Board Members
When it’s time to bring on an independent board member, Elad Gil’s playbook is a great reference. We’ve included the basic framework below with some of our own feedback, but you can find Elad’s complete guide here in his original post.
- 01 - Write a Job Spec
a. Experience
Operating experience
Market experience
Functional experience
b. Involvement with other early stage companies (optimally as a founder)
c. Personal rapport and attitude
d. Alignment of vision
e. Raw intelligence
f, Entrepreneur friendly (or long-term relationship)
g. Respected by investors / VCs
We suggest taking a step back and looking at the big picture before writing a job description. What are you solving for? Identify the perspective you are hoping to gain from bringing this person on board.
When you are putting this into writing, think about what your expectations are. What do you want help with? Think through this process the same way you would approach hiring someone for your company- effectively, that’s what you are doing.
- 02 - Agree On The Spec With Your Investors
- 03 - Create The List Of Options
- 04 - Spend Time Getting To Know The Potential Board Members
- 05 - Check References
We like to suggest that founders solicit feedback from existing board members as well.
- 06 - Finalize Who To Add
Also, take a look at Mark Suster’s playbook for selecting independent board members here. His general operational advice here is as follows:
- 01 - Somebody picks
- 02 - The other side approves
- 03 - There is a process in place for Plan B
If the person who is tasked with picking doesn’t complete the task on time, the approver takes control.
- 04 - Approval cannot be unreasonably withheld
- 05 - There is a clear removal and re-appointment process
Originally Published:
December 5, 2011, How to Choose A Board Member, Elad Gil- Elad Blog
February 24, 2019, What Makes a Great Independent Board Member, Mark Suster- Both Sides of the Table
More Characteristics to Consider
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Some other characteristics to consider in an independent board member come from Mark Suster and the post we referenced at the beginning of this guide. To him, a good independent board member:
Is local
Has industry expertise
Is a good mentor
Has startup experience
Has the time to commit
Has skin in the game
Is diplomatic - a good honest broker
Is responsible - in good times and bad