Establishing a Board of Directors
Forming an effective board of directors can be a powerful driver for your company’s success. Determining the right size, scope, and experience of the board is critical to a successful outcome.
Rules and Considerations
- Board size. While state law does not impose a limit, all states require at least one director.
- Length of term. Limiting how long a board member can serve keeps your business from stagnating.
- Meeting schedule. Draft bylaws.
Creating a High-Functioning Board
How can you create a high-functioning board? Start by thinking through what skills or knowledge you lack most. Fill those gaps first. Ideally, each member should bring a different expertise.
Getting Started with a Board of Directors
A board of directors is an incredibly important part of any business. Even more so for startups with big aspirations.
Structural Decisions
Here are some key structural decisions you will need to make when assembling a board:
- Format And Frequency. You might tweak the frequency and format of board meetings over time depending on your needs.
Additional Insights
Legal counsel is required to structure and update accordingly.
Directors who are independent are generally chosen from the executive ranks of boards of non-related corporations.