Insights: How boards of startups can add value

While Dubai has the potential to become a global startup city, startups face many challenges and uncertainties ranging from economic growth needs and funding gaps to talent acquisition and retention. A good governance system will help them avoid the many hurdles that are on their course.

The good thing about startups is that they can reach out to the many retired executives who have time and expertise on their hands and they have an unfulfilled desire to serve a board.

How to shape a board that can turbocharge a startup or new venture that is bootstrapped for growth is a different topic altogether. But assuming that you have got a board plan in the works, what should you do with it?

Young companies usually have neither time nor interest in adhering to board meeting formalities that include rigid agendas or “vote to amend the motion on the floor” kind of parliamentary niceties. Even then, early, smart meeting procedures benefit them, closing critical governance gaps and assisting with growth prospects.

What sort of a “mini-agenda” makes the most sense for startups?

Start with setting a regular calendar for board meetings, and sticking to it no matter what.  For venture startups, a monthly schedule is just about right and makes it clear that everyone on the board – founders, funders, mentors or any observers – are expected to attend virtually or in person. Yes, everyone is already overstretched building the company, and you are all in day-to-day contact anyway. But imposing a regular “time out” for specific governance matters compels all of you to switch the hats you wear on development, deal-making, sales, etc., to think like a board for a couple of hours. Stepping back this way will prove invaluable in planning for strategic gaps.

Since most startup boards are likely three to five people, all with some level of ownership power, don’t get hung up on who’s named chairperson. The founder, a co-founder, or an early investor on the board shall run the meeting, but for a company at this stage, claiming imperial power as “chairman” is simply ridiculous. Don’t fret about it, and just work through the agenda.

Speaking of meeting agenda, keep it simple, but make it an accountability tool. Everyone involved should know how various metrics stand at the moment, but a board meeting is a good way to assure that you are all looking at the same numbers at the same time (most of the daily information is likely going back and forth in bits and pieces). Expect the founder to put together a proper set of financials and updates for the meeting and also a progress report on output development and sales.

The board in turn signs off on any share issuances, term sheets, contracts above a pre-set amount, and other necessities. Some of these can be legally approved on the fly in the course of business but bringing the board together to discuss as a group keeps everyone on the same page.

The agenda should include dedicated time for strategy and should cover not just next quarter targets, but longer-term issues on funding, product timelines, partnering opportunities, talent acquisition and so on. Interestingly, Sequoia Capital perhaps because of their recent governance setbacks in their invested startups, set in place a simple agenda for early-stage startups that drills down on these items. They have also offered suggested times – but we feel working sessions on strategy deserve dedicated time than what was proposed.

Designate an assistant to minute your board meeting. This may seem like fussy busywork but proper minute-taking is a legal requirement, and assure everyone has a shared record of what was covered. It will be a handy listing of who promised to do what and by when.

Finally, when board members are in multiple locations, it may be time to use a VR/AR-based meeting tool where they can all have the same meeting room as the venue with their avatars in place of staid Zoom images. The costs of AR/VR gear will be a small fraction of actual board meeting costs without much loss of emotional involvement. This is where the next level of boards will meet and what better way than this for startups on a shoestring. 

Ralph is a global board advisor, coach and publisher. Dr M Muneer is co-founder of the non-profit Medici Institute and a stakeholder at the Silicon Valley-based deep tech firm Rezonent Corp