Stephen H Baum Leadership

Two comments in apparent conflict from a recent meeting of our CEO advisory board:

“One of the few things I regret is not having my board years earlier,” said one member. Why? “They made me do things I never would have done on my own and they were right.”

“My founder wants us to have a board, but she has in mind her offspring, our current professional service providers and someone she just met. Will they add value or cause me more work and more angst?” asked another.

The first company is majority owned by a private equity firm, very supportive of the founder/CEO but with clear ideas of how to think like and prepare for being a large (someday public) company. They have been active in discussions about strategy, topgrading the leadership team, Sarbanes Oxley, financial reporting and much more. They have been personally involved with candidates for the top positions. And the company has grown substantiallay in both top line and EBITDA even in the two years of ownership. It is a symbiotic relationship.

The second company is at an inflection point from a small business to one that may do $200 million in a short while, may have two geopraphies widely separated, each with its own quasi Division CEO. It is a multi-location, project-based business with big bets and a brand to protect in a “glass kitchen” industry (the leaders know a lot about each others’ companies). The CEO would do well to have a board like the one above. But, as the first CEO added: “Make no mistake — having a board is a lot of work and presents a lot of difficult decisions. Your team will have a lot of work, not just you. But it is worth it with the right board. And a nightmare with the wrong board.”

The results are not in yet, but the second CEO is likely to create an advisory entity populated by subject matter experts and people with smart rolodexes. Perhaps it will meet quarterly. Perhaps the people identified by the founder can be kept in the loop with greater frequency and on selected topics. We will see what the CEO can work out with the founder.

Even individuals starting out in business need their own “personal board of directors” and the board members need to know they are regarded as just that. All the more reason for an entrepreneur CEO to have a real board as early as possible.

That’s just my view. What’s yours? Please leave a comment.