Martin Rowinski is the CEO of boardsiaa corporate board recruiting firm, and an investor and author.
CEOs and founders have to be very good at what they do to succeed, but no one alone can be an expert in every subject, nor in every part of a company. With the combined insights of a carefully composed board, we may be able to do that. A board offers additional perspectives and the wisdom to have lived through different experiences of success and failure. When done right, a board drives a company’s growth and innovation with proven strategies, guiding better, more holistic decision-making.
While some of a company’s leadership may be eligible to serve on the board, the company’s potential to look inward to fill all board positions will be severely limited. External board members can help the company’s leadership see objectives and obstacles from different angles and paint a more complete picture.
What benefits do outsiders bring?
For most companies, their Board of Directors is a required part of business operations and usually includes at least one company insider, such as the CEO. However, to get the most benefit from what a board has to offer, it must also include members with specific qualifications that cover all areas where a company needs expertise most. Few companies have such high concentrations of top experts in all fields within their walls, let alone all of them willing and able to sit on a board. Searching for external members opens up your opportunity to find someone with the precise skills your company needs to support its growth path.
Outside members provide unbiased advice and help boards of directors make more objective decisions. Their fresh perspective can see more sides of a problem than a board of just company insiders, enabling them to achieve different goals and come up with new ways to approach solutions.
When many minds with this in-depth knowledge devise a strategy around a problem, they fill more potential gaps and maximize the results of each effort, helping them achieve goals faster. The company and its leadership take advantage of an outsider’s new skills and networks. Big names from an outside industry can make a board credible, and their resources and contacts open up a new pool of opportunities for recruiting top talent and investors.
Look outside your industry.
Board members with extensive experience in other sectors can offer even more perspectives that open the door to new potential opportunities. This fresh look at the day-to-day running of your company’s industry can provide solutions and improvements not only for the company, but also for the industry itself. No one can be an expert at everything, but having board members with expertise outside your own field can help solve problems at a higher level.
Above all, your board of directors must provide your company with good governance, which works most effectively when its members can cover more foundations. A board member with experience as a CFO could provide stronger financial coverage. A COO can support the company with recruitment, budgeting or administration. By turning to business leaders from other industries rather than your internal CFO or COO, you gain those valuable outside perspectives and increase the capacity of the company’s leadership so that everyone can do their job better.
How to find them?
When looking for external board members, the best first step is to consider where your company could use more experience or training and to find people to fill these expertise gaps. External board members have the potential to redefine a company’s trajectory with explosive growth, but only for those who choose them wisely.
Instead of looking for years of experience in your company’s industry, focus more on the specific skills an executive in any industry can bring to your company and how much experience they have developing them. Focus on people with skills that can help you overcome obstacles that your business may struggle to overcome.
Use the application process to test whether the outsider perspective that a candidate brings in brings new ideas. Start with a deep dive into your company’s mission, vision and values. Define what you are trying to achieve and match the candidate’s qualities. Then choose their brain. Ask how they would approach relevant scenarios so you can see if they bring anything new to the table.
Don’t be afraid to look at different sectors or seek outside input that aligns with your company’s goals. The skills your board members bring to your business can take it to new heights, so choose wisely and then lean on your board members to get you there.