How to Break the Familiar Pattern of Board Dysfunction in a Startup




After watching Board Dysfunction: Root Causes and Solutions, an experienced CEO told me that the video succinctly identifies and summarizes issues that are intuitively clear but often overlooked in practice. Experienced investors know that successful investing often employs pattern recognition. But when it comes to boards of directors, the unfortunate recurring pattern that is familiar to many experienced directors raises red flags about dysfunction. This is particularly acute for startups because most startups have inexperienced board members, and usually the least experienced directors come from the management team. This problem is compounded in the earlier stages of a company’s development because inexperienced co-founders often make common mistakes that could be avoided. Left unchecked, such errors in board management, board configuration, and in board process can cripple a company’s future growth path.

If you are an entrepreneur involved with your first startup, a venture capitalist who wants to educate management on acceptable and unacceptable board behavior, or an independent director new to small company board dynamics, this video should be helpful to you. The video combines PowerPoint slides with specific anecdotes to illustrate frequent errors made by inexperienced boards. The content also highlights typs of behavior that are unacceptable and that should raise concerns among all directors.

It’s easy to say that directors need to communicate more frequently and openly. ┬áBut how do you accomplish that? How do you hold directors accountable to each other? The video outlines process tools that are readily available to boards and that can help solve problems. Ironically, viewers may watch this and feel that a number of the points raised are intuitively clear. That is actually the point of this work– most of the time, the people in the room know what’s wrong, they feel it, but they either don’t feel comfortable articulating the problem or can’t easily implement the solution. By watching this video with your peer directors, you can now raise issues that are already in your mind but have not been comfortably stated out in the open.

Please consider this video to be a management tool. It is for investors and entrepreneurs alike, with a focus on the perspective of the entrepreneur.

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