As your business expands, the pressure on your time will become even greater. At first, it might have been possible to do everything yourself, or with a very small team. But as sales and headcount grow and new opportunities present themselves, it becomes much harder to be involved in every part of the business and with every decision.
Still, some entrepreneurs remain close to every single aspect of their company, even as it moves from start-up to thriving business. This can have huge advantages – who knows a business better than the founder? – but it can also divert your attention from making the important strategic decisions. This is when it’s time to consider a chairperson or non-executive director.
A new view
An individual independent director or board of directors led by a chairperson can provide a new perspective and offer the benefit of experience when it comes to making big decisions. By being a step removed from the day-to-day running of the business, they also avoid being dragged into factions or making short-term decisions.
“You avoid groupthink,” says Caroline Hayward, Chief Executive and founder of the Chairman’s Network, a collaborative business network for chairmen, chairwomen and non-executive directors. “You’ve got people from very different backgrounds who come to discussions and problems in a different way.
“It’s also useful to have others to do some strategic thinking. They’re there to ask the difficult questions and help you look to the future. They need to be forward thinking and not backward thinking.”
More specifically, a chairperson or outside director can help you prepare for a sale or large investment if they have previous experience of such matters. Bringing in someone with those skills can allow you to continue to run the business.
“If you take your eye off the ball to do the other activity, potentially your sales will suffer, which is exactly what you don’t want if you’re about to do an exit,” says Hayward.
Filling the role
But how do you go about finding the right chairperson? Many entrepreneurs will look to their contacts book for someone with the right levels of experience and expertise. It will often be an early-stage investor in the business with knowledge of fast-growing companies. Businesses backed by venture capital or private-equity investment frequently have a specialist chairperson supplied by their financial backers.
When choosing a chair, Hayward advises entrepreneurs to keep in mind what you want them to bring into the business in terms of skills, contacts and expertise. It might be knowledge of e-commerce or how to sell to a particular market, such as China. For specialist skills, it can be difficult to find someone perfectly suited from your own network, in which case it’s worth joining a peer business network to meet and engage with new connections or engaging a recruiter.
One issue with relying on your own contacts book to find a chairperson or director is that you have only a very limited and potentially un-diverse pool to choose from. Those contacts who have enough experience and business knowledge to act as a chair are likely to be drawn from a limited group. This is why boardrooms – from large listed companies to small businesses – have historically struggled for diversity in the shape of female and minority-ethnic representation.
Hayward says: “If you restrict [yourself] to your contacts, it’s limiting the pool; it’s more of the same. It’s historically been a bit of a closed shop, but it’s starting to turn a corner because people are increasingly cognisant of the fact that they have to be more diverse to succeed.”
The value of an advisory board
If you think you’re ready to start building a board, a good place to start is with an advisory board. These are not formal appointments, but instead act as advisers, ready to provide guidance when required. The positions don’t necessarily have to be paid, so can be a useful way to discover you’re ready to start working with a formal board of directors. They can also bring you a step closer to finding your first chairperson.
“If you’ve got an advisory board, then you’ve got a natural hunting ground for your non-executive directors and chair for when you do set up a board,” says Hayward.
As your business expands, the pressure on your time will become even greater. At first, it might have been possible to do everything yourself, or with a very small team. But as sales and headcount grow and new opportunities present themselves, it becomes much harder to be involved in every part of the business and with every decision.
Still, some entrepreneurs remain close to every single aspect of their company, even as it moves from start-up to thriving business. This can have huge advantages – who knows a business better than the founder? – but it can also divert your attention from making the important strategic decisions. This is when it’s time to consider a chairperson or non-executive director.
A new view
An individual independent director or board of directors led by a chairperson can provide a new perspective and offer the benefit of experience when it comes to making big decisions. By being a step removed from the day-to-day running of the business, they also avoid being dragged into factions or making short-term decisions.
“You avoid groupthink,” says Caroline Hayward, Chief Executive and founder of the Chairman’s Network, a collaborative business network for chairmen, chairwomen and non-executive directors. “You’ve got people from very different backgrounds who come to discussions and problems in a different way.
“It’s also useful to have others to do some strategic thinking. They’re there to ask the difficult questions and help you look to the future. They need to be forward thinking and not backward thinking.”
More specifically, a chairperson or outside director can help you prepare for a sale or large investment if they have previous experience of such matters. Bringing in someone with those skills can allow you to continue to run the business.
“If you take your eye off the ball to do the other activity, potentially your sales will suffer, which is exactly what you don’t want if you’re about to do an exit,” says Hayward.
Filling the role
But how do you go about finding the right chairperson? Many entrepreneurs will look to their contacts book for someone with the right levels of experience and expertise. It will often be an early-stage investor in the business with knowledge of fast-growing companies. Businesses backed by venture capital or private-equity investment frequently have a specialist chairperson supplied by their financial backers.
When choosing a chair, Hayward advises entrepreneurs to keep in mind what you want them to bring into the business in terms of skills, contacts and expertise. It might be knowledge of e-commerce or how to sell to a particular market, such as China. For specialist skills, it can be difficult to find someone perfectly suited from your own network, in which case it’s worth joining a peer business network to meet and engage with new connections or engaging a recruiter.
One issue with relying on your own contacts book to find a chairperson or director is that you have only a very limited and potentially un-diverse pool to choose from. Those contacts who have enough experience and business knowledge to act as a chair are likely to be drawn from a limited group. This is why boardrooms – from large listed companies to small businesses – have historically struggled for diversity in the shape of female and minority-ethnic representation.
Hayward says: “If you restrict [yourself] to your contacts, it’s limiting the pool; it’s more of the same. It’s historically been a bit of a closed shop, but it’s starting to turn a corner because people are increasingly cognisant of the fact that they have to be more diverse to succeed.”
The value of an advisory board
If you think you’re ready to start building a board, a good place to start is with an advisory board. These are not formal appointments, but instead act as advisers, ready to provide guidance when required. The positions don’t necessarily have to be paid, so can be a useful way to discover you’re ready to start working with a formal board of directors. They can also bring you a step closer to finding your first chairperson.
“If you’ve got an advisory board, then you’ve got a natural hunting ground for your non-executive directors and chair for when you do set up a board,” says Hayward.
As your business expands, the pressure on your time will become even greater. At first, it might have been possible to do everything yourself, or with a very small team. But as sales and headcount grow and new opportunities present themselves, it becomes much harder to be involved in every part of the business and with every decision.
Still, some entrepreneurs remain close to every single aspect of their company, even as it moves from start-up to thriving business. This can have huge advantages – who knows a business better than the founder? – but it can also divert your attention from making the important strategic decisions. This is when it’s time to consider a chairperson or non-executive director.
A new view
An individual independent director or board of directors led by a chairperson can provide a new perspective and offer the benefit of experience when it comes to making big decisions. By being a step removed from the day-to-day running of the business, they also avoid being dragged into factions or making short-term decisions.
“You avoid groupthink,” says Caroline Hayward, Chief Executive and founder of the Chairman’s Network, a collaborative business network for chairmen, chairwomen and non-executive directors. “You’ve got people from very different backgrounds who come to discussions and problems in a different way.
“It’s also useful to have others to do some strategic thinking. They’re there to ask the difficult questions and help you look to the future. They need to be forward thinking and not backward thinking.”
More specifically, a chairperson or outside director can help you prepare for a sale or large investment if they have previous experience of such matters. Bringing in someone with those skills can allow you to continue to run the business.
“If you take your eye off the ball to do the other activity, potentially your sales will suffer, which is exactly what you don’t want if you’re about to do an exit,” says Hayward.
Filling the role
But how do you go about finding the right chairperson? Many entrepreneurs will look to their contacts book for someone with the right levels of experience and expertise. It will often be an early-stage investor in the business with knowledge of fast-growing companies. Businesses backed by venture capital or private-equity investment frequently have a specialist chairperson supplied by their financial backers.
When choosing a chair, Hayward advises entrepreneurs to keep in mind what you want them to bring into the business in terms of skills, contacts and expertise. It might be knowledge of e-commerce or how to sell to a particular market, such as China. For specialist skills, it can be difficult to find someone perfectly suited from your own network, in which case it’s worth joining a peer business network to meet and engage with new connections or engaging a recruiter.
One issue with relying on your own contacts book to find a chairperson or director is that you have only a very limited and potentially un-diverse pool to choose from. Those contacts who have enough experience and business knowledge to act as a chair are likely to be drawn from a limited group. This is why boardrooms – from large listed companies to small businesses – have historically struggled for diversity in the shape of female and minority-ethnic representation.
Hayward says: “If you restrict [yourself] to your contacts, it’s limiting the pool; it’s more of the same. It’s historically been a bit of a closed shop, but it’s starting to turn a corner because people are increasingly cognisant of the fact that they have to be more diverse to succeed.”
The value of an advisory board
If you think you’re ready to start building a board, a good place to start is with an advisory board. These are not formal appointments, but instead act as advisers, ready to provide guidance when required. The positions don’t necessarily have to be paid, so can be a useful way to discover you’re ready to start working with a formal board of directors. They can also bring you a step closer to finding your first chairperson.
“If you’ve got an advisory board, then you’ve got a natural hunting ground for your non-executive directors and chair for when you do set up a board,” says Hayward.