If You Want a Good Relationship With Your Board, You Need to Ask These Questions
These are the top five questions founders don't ask their boards, but should.
The following is adapted from Elena L. Botelho and Kim R. Powell's book The CEO Next Door.
We were recently called up to Chicago to coach an entrepreneur of a $50-million company whose frustration level with his board was moving toward detonation. After an hour of conversation, he pleaded with us: "Just tell me what to do to get this board off my back."
We asked, "Have you ever tried to put yourself in the lead director's head? Do you know how his broader investment portfolio is doing and how this business fits in?"
No, he admitted.
This situation is hardly uncommon. Since 1995, our team has advised and assessed over 17,000 C-suite executives, including over 2,000 CEOs and CEO candidates of which approximately 17 percent were founders. Of the 100 CEOs we interviewed for this article, slightly more than half (57 percent) said the board added value to the company, while 43 percent said the board was either neutral or destroyed value.
Entrepreneurs, especially in the early years, spend so much time trying to prove their concept and themselves, making it easier to overlook one of the cardinal rules of business (and life). If you want to win people over, first understand who they are and what they care about.
Board members are, after all, human beings. Like you, they are driven by their own pressures, dreams and fears. When founder-board relationships break down, it's typically because the founder has little insight into what motivates his or her board members -- and vice versa.
Without that connection, these relationships can go south quickly. In our review of 70 CEO firings, one-quarter of dismissals stemmed from broken board relationships. And in situations where a board has majority control, it typically takes just two years to push out an underperforming CEO, often placing an externally sourced CEO in the place of a founder.
So, how do you build strong relationships with your board members? While some may be personal connections, all too often, entrepreneurs find themselves with investors they don't personally know or independent board members they may have interviewed but didn't source. In our work with entrepreneurs, we encourage them to start by asking their board members these questions:
1. What excites you the most about being on this board?
Succeeding with the board starts with understanding how their performance is measured and what motivates them. Do they crave relevance, status, stimulation, compensation? Most board members genuinely want to add value, but understanding why they're there can help you engage them more deeply.
2. Where have you focused your time and efforts in the past?
This question will help you understand each board member's competencies and shed light on how they have operated on boards in the past: How often did they meet? What level of detail did they involve themselves in? How were decisions made? How did they tackle crises?
3. Where and how would you like to engage in the future?
This is an opportunity to get a clearer picture of how much of each board member's time and attention you're likely to get. It also eases board members' doubts about how they can contribute and be useful to you and the company.
4. Whom on the board do you talk with most often?
With this question, you are looking for clues as to who is influencing whom. A board member can capture undue influence by forcefully asserting himself in meetings and building strong relationships with other board members. It's important to understand existing relationships, try to rein in those that could create dysfunction and strengthen those that put the company on the path to success.
5. What does success look like, for the company and for me as CEO, in one year? In three years?
This is the start of many conversations to align on what success looks like -- and how it will be measured. From day one, it's critical to get everyone on the same page when it comes to measuring performance. As one CEO I worked with pointed out, "Having five or seven bosses requires common ground on how you read the business, so make sure you find common ground in how you define success."
Failure to manage the board is among the top three most commonly cited mistakes made by CEOs. By investing in these relationships, you build a platform where you are working together as partners in reaching the organizational goals. You are planting seeds that will bear fruit for years to come.
Related Video: 5 Reasons Why Even Small Companies Need a Board of Directors
Elena Botelho is the founder and co-leader of the CEO Genome Project. She has been advising leading CEOs, boards, investors and rising stars for over two decades at McKinsey and ghSMART. Kim Powell is a principal at ghSMART where she advises Fortune 500 senior executives, private equity firms and non-profit leaders in the areas of management assessment, leadership coaching and organizational change.