What if your job search experience was more constructive? What if it felt more like building a partnership rather than knocking on endless un-opening, unresponsive and uncaring doors?

There is no reason your job search could not be a more positive experience. Obviously losing one’s job is not necessarily a positive experience, but the act of moving on, finding another place where you can grow and help grow that organisation could be a more positive experience.

The first task for everyone concerned: the hiring manager, the recruitment manager/consultant and the job seeker is to understand what is their partnership project. 

That is to say:

• that the hiring manager needs to really think about what skills they need to add to the company to add value to it and how they can add value to the development of the future employee’s career;

• the job seeker needs to reflect on what is their next development objective to add value to their career and the next company they join; and

• the recruitment manager/consultant needs to understand both of these perspectives to be able to broker and alliance manage this partnership.

Let us look at the first task of the hiring manager, as this is the starting point to the entire partnership. Writing a job description should not be a tough ask if the hiring manager understands what it is that the company needs. If the hiring manager really understands what the company needs are then the job description should not read like an ingredient list for an exotic dish, i.e. it should not ask for a person who can do everything under the sun – because if we go by the commonly believed notion that people apply for jobs for which they are up to a 60% match, inevitably the advertisement will get more applications than bargained for and not all would be relevant.

Instead, the job description should:

• say what the company is, what it does and what are its growth ambitions;

• state why the role exists;

• what is the incumbent supposed to do and the reporting line;

• be precise, with salient person requirements outlined – this should be no more than half an A4 page;

• truthfully define company culture and structure;

• define salary range; and

• not exceed one A4 page in total.

This one-pager forms the basis of the partnership marketing and the subsequent discussions.

If a one-pager job advertisement as described above is the starting point, then the job seeker should be able to immediately identify whether they are qualified to do the job. This means that a reciprocally precise one-pager CV tailored to the role and a one-pager supporting statement outlining why they are suitable for the role should be written in response. This then heralds the start of a recruitment partnership.

The recruitment manager/consultant has the most important task in this partnership. They need to acknowledge that they have received the request for the partnership and give timelines on the process duration and steps. The recruitment manager/consultant must then keep the jobseeker informed at all stages, giving feedback, and giving information that may be crucial in the next step of the process. They should understand what the partnership project is so that they can meaningfully provide their feedback. It is not sufficient to say we found better people than you to be our partner. Instead, to say why the alternative partner candidate was better is far more respectful and meaningful, because this leaves the door open to potential future partnerships with the same people but in other partnership projects that suit the job-seeker’s skills and abilities more. It would also leave the door open for a future partnership where the tables are turned, and the jobseeker becomes the recruitment manager who would engage the same recruitment consultant for their recruitment partnership project.

All of this is possible, and it all starts with the right partnership project description, an alliance manager who expertly manages the partners’ expectations during this short partnership and brings the partnership to a respectful end, either by offering a job and therefore initiating an employer/employee partnership or not offering the job and ending the recruitment partnership project.

This would require everyone involved in the job market to look at the interaction between jobseeker, recruitment manager/consultant and the job creator/employer, as a partnership. A partnership with its own parameters and with respectful communication at the heart of it. It is possible, and it only requires that we all buy into it.

How do staff members contribute to the work of the board?

While the CEO has the sole responsibility for implementing the board’s directives, staff members play key roles in helping both the CEO and the board do their work well, including:

• Provide informative reports to the CEO that they can incorporate the information into their reports to the board

• Create dashboards to help the board evaluate how well the organisation is performing. Good data are essential to good governance, and boards depend on staff members to gather and present the data in an understandable manner.

• Support the work of committees. Many boards have committees that relate closely to one or more functions, such as finance or human resources. These staff members sometimes become the main resource for committee chairs. Some may serve as staff liaisons to the appropriate committees. In this role, the staff can help committees and board members focus on board issues, not staff responsibilities.

• Respond to inquiries between meetings. The board should channel these requests through the CEO so they are aware of the board’s information needs.

Can board members to be too removed from the day-to-day operations of the organisation to make good decisions?

When it comes to boards and governance, it would be useful if a simple formula could be applied. However, that is not usually the case, so what is needed is a workable balance that allows the board to add value and to lead in a meaningful way while supporting and enabling the chief executive and staff to do their jobs.

Effective boards engage in strategic governance - defining, deliberating, and deciding the matters with the greatest impact on an organisation’s short- or long-term well-being - and do not cross the line into micromanagement by participating in the actual operations of the organisation.

The extent to which a board micromanages or not varies depending on the circumstances, such as the level of development of the organisation, the internal capacity of the organisation, or the continued employment of the chief executive. Sometimes precipitating events, such as a change of CEO, discovery of financial mismanagement, a crisis, or lack of confidence in the chief executive may require the board to step in and play an active role.

It is also possible for the board to swing too far to the other end of the spectrum and become too removed If all information is funnelled only through the chief executive, they become the gatekeeper of the board. Some would argue this promotes harmony and reinforces the authority of the chief executive. However, it also can disconnect the board from the culture of the organisation, its clients, staff, and shareholders.

When working with the chief executive, the board should look for appropriate opportunities to create board/staff stakeholder committees, or task forces, so that the board has a better understanding of organisational culture and can hear from those who are directly involved in delivering the work of the organisation. Boards should consider how they can formally get feedback from staff about organisational and chief executive performance. The board’s role of supporting the chief executive is not at any or all costs. Advancing the purpose of the organisation requires a well developed culture of inquiry inside and outside the boardroom.

Questioning and challenging assumptions, seeking information, and testing perceptions against realities can help reinforce strengths or expose weaknesses. Protecting the integrity of the organisation is part of the board’s job. This cannot be done sitting high in an ivory tower. The key is to be transparent and thoughtful and to communicate effectively.  The board should work with the chief executive to implement processes and opportunities that promote trust. They should also verify the accuracy of what’s being presented to the board. Otherwise, the board may be surprised to learn the organisation is not doing as well as it thought.

What is the role of the company secretary?

To help with the coordination of communication between the board and staff and other board/staff tasks, many organisations have a company secretary or board liaison officer, who serves as the link between the board and senior management, as well as some external stakeholders.

The need for a role with direct access to the board and chief executive usually occurs in a start-up with a multi-faceted scope and a relatively large scale of activities. A major benefit of a company secretary position for the board is having someone who supports the full range of board work from communications to logistics of board and committee meetings. The chief executive benefits from having a knowledgeable liaison between the senior staff and the board. It also frees them to focus on big issues rather than logistics.

To whom does the company secretary report? This is an important question and must be clarified for all parties. It is important to be explicit about who can hire or dismiss the person, or evaluate their performance.

• Chief executive: This is the most common situation. It is important to note that because this position requires full access to key organizational issues and documents, it goes beyond being an administrative position.

• Board: When the company secretary reports to the board, it is often a largely administrative position where individual board members rely on this person to handle some of their own duties.

Most of the tasks assigned to this position depend on the role definition. These responsibilities might include the following:

• Board meetings: Attend all meetings, manage meeting logistics, take minutes

• Liaison: Serve as the chief contact between the board and senior staff, provide administrative assistance to the board, assist in drafting key documents, keep organizational records, such as articles, bylaws, and minutes

• Advisor and trainer: Advise board members on key governance issue, assist with board member recruitment and induction, assist in reviewing governance guidelines, stay on top of industry trends

Partnership is essential

Ultimately, the roles played by the board, CEO, staff and company secretary in a specific organisation will depend on that organisation’s characteristics and needs. Three things are essential. Firstly, ensure that the different roles are properly defined, with clear parameters of action for each role. Secondly, ensure there is a clear and easy to follow review process, which allows these parameters to be amended if necessary. And finally, work in partnership with each other, communicate effectively and understand what each constituent part contributes to the achievement of your organisation’s goals.

Anyone new to working at a start-up may find themselves wondering what their role is in relationship to the board – an entity that has ultimate responsibility for the organisation. Are you likely to occasionally see board members around the office, and if so, how should you interact with them? Will you be expected to take direction from them? To collaborate with them on projects? Or are there invisible lines drawn that delineate the roles of board and staff, and are these lines that should not be crossed?

These are all good questions, without one correct answer. The partnership between the board and the executive team, and the partnership between the board and the staff can be complicated and difficult to navigate at times. The partnerships will fluctuate based on where the organisation is in its lifecycle, and sometimes on the personalities of the key players.

What are the main roles of the board, the CEO, and the staff?

The board

When defining the role of the board, it is important to remember that it refers to the group, not to individual board members. The board functions as a team. Individual board members inherently have no authority, or individual rights, over the organisation but must assume accountability for their own actions. The full governing body has three main things that it focusses on:

• Direction: The board guards the purpose of the organisation and, through guidelines, steers it in the right direction.

• Oversight: The board monitors the activities, the health, and the ethical behaviour in the organisation.

• Resources: The board ensures that the organisation is well-equipped to fulfil its purpose, i.e., has adequate finances, capable staff, and an excellent reputation.

The CEO

The chief executive is responsible for maintaining regular contact with the board and, particularly, the chair. They keep the board informed about the issues and activities that are part of the organisation’s daily life. In fact, the board would have great difficulties making well-rounded decisions without constant input from the chief executive.

The staff

In the beginning of a start-up’s existence, it is common for board members to wear different hats, which may also include functioning in a staff capacity. When the board hires the first CEO, it delegates the daily management to that person. The chief executive reports to the board and any staff who are subsequently hired report to the chief executive. The staff helps the chief executive more efficiently implement the directives set in partnership with the board.

Working together

It is not always easy, or even possible, to draw a clear line between governance and management. The board’s duties centre on its strategic framing and oversight roles. The chief executive, on the other hand, is responsible for making things happen with the help of the rest of the staff. However, both sides need each other’s support and availability, when requested, without falling into the trap of micromanaging.

Specific responsibilities

1. Oversight

a. Board

Health and success of the organisation

• Drafts and/or approves broad policies to guide and protect the organisation, board, staff, and shareholders

• Monitors all legal requirements to ensure they get proper attention

• Hires the CEO and delegates daily operations to them

• Expects regular and objective reports from staff via the CEO

b. CEO

Programmes and Administration

• Monitors daily operations and ensures appropriate staff and operations policies are in place

• Hires staff and delegates operational responsibilities to them

• Shares all news, good and bad, with the board

2. Planning and evaluation

a. Board

Strategic framework for the organisation

• Adopts an overall strategic mind-set, focusing on the big issues that matter most

• Actively participates in strategic sessions and away-days

• Annually evaluates the performance of the chief executive and determines appropriate compensation

• Evaluates its own performance regularly, at least every two to three years

• Assesses the organisation’s achievement of its goals via reports from the CEO

b. Chief Executive

Strategic and operational plans

• Ensures that strategic planning happens with the board’s appropriate involvement

• Leads operational planning and approves the plans for the staff

• Ensures a process for staff performance exists, approves staff compensation, and evaluates their performance

3. Finances

a. Board

Fiscal and fiduciary duties

• Makes sure adequate financial expertise is present on the board

• Sets overall fiscal policies and ensures appropriate internal controls

• Approves the annual budget and carefully monitors the financial reports

• Appoints an auditor and reviews the audit in an executive session with the auditor

b. Chief Executive

Financial management

• With the help of the financial staff, prepares the annual budget and provides the board with regular

financial statements

• With staff, handles the daily financial operations and monitors cash flow

• Defines financial policies and procedures for all daily money transactions

In our experience, if the board and CEO can create a partnership along these lines, they will create the best possible partnership to drive the success of their organisation. Clear, unambiguous roles and responsibilities, with an understanding of what each part of the partnership brings to the table and a commitment to open and honest communications will provide your organisation with an effective and productive partnership at the heart of the decision-making process.

In some company cultures, executives feel their board members are coaches and mentors. Others think that they are the police. Both are wrong. The relationship between the board and the executive should be a collaboration, a partnership. Strengthening effective collaboration between the executive team and the board helps build a high-performing organisation. It leads to more open communication, constructive discussion, and strategic decision-making built on relationships that are grounded in trust, alignment and communication.

The CEO and executive team are responsible for driving excellent engagement with their board. Every executive team fully understands the incredible difference it makes to have a highly supportive board that balances constructive intelligent challenge, debate and oversight with great expertise, encouragement, independence of mind and, crucially, support, that adds significant value to the executive team.

Yet many executive teams are unsure what “great” actually looks like. They do not know what is the model for a healthy executive/board engagement. As a result, many executive teams struggle to identify what they could do differently that will improve relations and effectiveness.

When we have engaged with boards and executive teams to try to resolve tensions and improve effectiveness, we have noticed that there are common points of friction between boards and executive teams. Key factors included:

• Lack of trust

• Poor decision-making

• Lack of openness

• Poor quality of debate

• Inadequate reporting

• Micro-managing by the board

• Poor communications

These are the leading causes of frustration and inefficiency – complicated by significant levels of misalignment within and between the two groups.

The root cause is misalignment. But what does this mean? People interpret things differently but cannot always integrate their perspectives. Dissonant views in action  build up to the serious, observable problems that are all too familiar. This is misalignment. Instead of hoping things will sort themselves out, it can be dealt with constructively.

When the extent of misalignment between people in teams can be identified and measured, what results is in effect a gap analysis. This allows the board and executive team to work to close the gaps. This should be done one focus area at a time – sharing perspectives and uncovering underlying assumptions before taking action to resolve differences:

• Finding common ground and accepting differences

• Bridging between two or more ideas to create new possibilities

• Creating scenarios and options

• Thinking through any unanswered questions that still need to be addressed

• Reaching consensus on the best next steps to take

• Setting the parameters of action for the board and the executive team

Executive teams can function with an average relationship with their board, but it is not a solution for the long term. It ultimately inhibits the organisation’s ability to perform to its maximum potential. When challenging times come around (as experienced with the Covid pandemic and subsequent economic downturn), the combined executive team and board must excel in partnership to drive long-term sustainable success for the organisation’s shareholders, stakeholders, customers and employees.

Once the executive team and board know what “great” looks like, and has an integrated set of expectations, they will be empowered to excel for everyone. Through improved communication and engagement, a greater level of trust can grow, leading to high-quality board and committee meetings that add significant value, sharper reporting, healthier challenge and debate, improved strategic focus, greater support and value-add from the non-executive directors and, most importantly, improved decision-making.

A more valuable, collaborative, trusting and effective partnership with your board or executive team is within reach. Be honest and open in your communications within and between the teams, avoid personalising the issues, agree how to agree, and how to disagree, and set concrete next steps towards a proper board/executive partnership.

Next week we will look in more detail at what the parameters of action between the board and the executive should look like.

What is special about working in an organisation and why do we do it? Apart from the obvious answer of wanting to earn money there is a fundamental mutual benefit to both parties. The employee is gaining an opportunity to acquire experience in order to grow and is giving their experience or their labour to help the organisation grow. In essence, two people are partnering to add value to themselves and to the organisation. This is no different to two organisations coming together and forming a partnership. It is just on a small and person to person scale.

So, if all of our employment relationships are essentially partnerships in micro-scale, why should we not treat them as we would a strategic partnership with another organisation? That is to say that we set in place the parameters of the partnership:

• Who decides?

• Who devises the strategy?

• What is the aim of the partnership?

• Who performs the work?

• What are the deliverables and when are they expected to be delivered?

• What do you do with the deliverables and who owns them?

• How do you communicate within the partnerships?

• What are the governance arrangements and joint team structures?

• What happens in case of conflict or disagreement?

• When does the relationship end and how will it end?

We monitor the development of the relationship. Both parties work hard at making the relationship work and grow. Both parties are civil to each other and respect the opinions of their partner. Both parties talk to each other at times of difficulties so that the issues do not lead to an impasse, and both parties understand exactly what it is that is expected of them, because the parameters have been made clear from the start.

Within this partnership-style people management structure, people are free to be innovative and deliver results within the parameters set without the need for further consultation. Furthermore, ideas at the micro-level that fall outside the parameters are heard, listened to, analysed and discussed. However, it does not mean that they are implemented. That is because at the macro-level, the ideas and voices of the micro-level have to fit in with the strategy of the organisation, the competitive landscape and the needs of the shareholders. Otherwise, within this employer:employee partnership, the organisation will have numerous partners working at the micro-level delivering self-inspired objectives that perhaps have nothing to do with the overall strategy and the needs of the shareholders or are completely out of sync with the competitive landscape. This does not mean that an employer:employee partnership is a dictatorial one. It is one that gives freedom to operate within the parameters of the relationship, where new ideas are respected, heard and considered but not necessarily implemented.  But feedback is given on why the ideas are not implemented, the same as when two partnering organisations consider, analyse and reject or accept new ideas for the partnership.

In contrast a dictatorial structure would demand that something is done, normally without guidance or structure and intimidate the workforce in doing so. In one memorable occasion a certain dictatorial manager became so enraged that what he was saying was not, in his opinion, getting through to the team, that he started to stamp his feet on the floor of the meeting room and bang his fists on the table. This in itself was terrifying enough, but because the room was built on stilts the whole room shook while this performance was taking place, which gave the feeling of an earthquake raging through the room. We can have a nervous laugh at this long-gone experience but at that moment, the whole room of adults were quietly horrified at being treated like naughty children and everyone had their head down staring at their pens jumping up and down on the table. Nobody grew under this management structure, what we all learnt was this was not how to run an organisation.

We have all had our share of traditional and new-age management experiences and the one style of management that has stood out as the most effective one to date has been the one that embodied the partnership model. It gave enough room for innovative ideas to be developed and implemented by partners at the micro-level without jeopardising the overall macro-outlook and strategy. By implementing this sort of partnership, it allowed the biggest career and self-growth margin in our experience. In contrast, employer:employee experiences which were either dictatorial, micro-managing, or free for all structures did very little for personal growth, development and confidence building and served only to alienate a large portion of the work-force.

Some partnerships come to an end purely as a result of the natural conclusion of the partnership. That is to say the work they intended to do together has reached its useful end, either because the results that were needed or wanted had been obtained or could not be obtained in the existing partnership. However, more often than not, a partnership comes to an end because the parameters of the partnership were not clearly defined or not clearly understood.

You may wonder what is meant by parameters of the partnership and how the parameters might affect your day-to-day activities. The parameters, some of which are outlined below, are the key to the general understanding each partner has of their responsibilities. Parameters can include:

• Who decides?

• Who devises the strategy?

• What is the aim of the partnership?

• Who performs the work?

• What are the deliverables and when are they expected to be delivered?

• What do you do with the deliverables and who owns them?

• How do you communicate within the partnerships?

• What are the governance arrangements and joint team structures?

• What happens in case of conflict or disagreement?

• When does the relationship end and how will it end?

It is not sufficient that senior management has bought-into the partnership and its parameters.

You will need buy in at every level so that the partnership and its deliverables are part of the objectives of the departments and personnel impacted by the partnership.

This may seem obvious, but if the objectives and deliverables of the partnership are not made part of objectives of the workforce, then there is no incentive for anyone to work on the partnership or to add any value to the project. We have seen numerous examples where management assumed that the objectives of a new partnership would just diffuse through the workforce and be delivered, where in fact, the workforce assumed that it was not a priority, since it was not a company objective, and deprioritised it to the point where nothing was done at all.

Misunderstandings, false perceptions, and cultural differences (company culture as well as national culture) can often create difficulties in partnerships.

It is easy to get entrenched in an idea that the other party is out to get some undefined and unagreed benefit from the partnership. We have seen this happen too often.

In one example within a pan-European consortium, the parties were refusing to renegotiate a clause in the consortium agreement which would have allowed a life saving treatment to be developed by only one of the partners of the consortium, despite it allowing for joint downstream benefit for all of the original consortium. The perception was that the single beneficiary, by having  the reputation to be able to acquire funding for the development of the asset, was somehow deceiving the rest of the consortium. It was of course not true, there was no deception, only false perception.  To dismantle false perception you will either need everyone in the consortium to suddenly put aside their prejudices or you need an external party to deconstruct all the worries and concerns and lay them to rest by coming to a mutual understanding that can be put into an agreement.

For the aforementioned consortium, the alliance management team were able to resolve the conflict and negotiate wording in the contract that allowed the transfer of the asset. You may think that everyone was delighted, but in reality, the disagreements stemmed from deeper mistrust that had brewed over many years of the partnership, souring the collaboration in the long term. The consortium did not last long beyond that particular incident. This is sadly more common than may be believed.

The key is always to communicate openly with your partners at all stages so there is less chance of these misunderstandings.

Set your parameters and stick to them. Pick up the phone and call your counterparts in the other organisations when there is something that needs to be resolved immediately. Do not let misunderstandings fester and become an impasse in the relationship.

Most of all, remember that a partnership is not a luxury or a nice to have badge on your web pages. It is there to help you deliver the strategy of your company or organisation. Think carefully about whether having a partnership will add value to your company and only when the answer is yes, devote your company’s resources to finding a partner, building a partnership, and nurturing it to survive and succeed.

When you have all the desirable traits for a partner and have shown that your chosen potential partner can add value to a partnership, all that remains is to form the partnership and make it a long lasting and mutually beneficial relationship. This is easier said than done and it requires self-knowledge and vigilance.

What is meant by self-knowledge in the context of your business? Simply put, it means thinking thoroughly about your current and future plans.

First, it is important before embarking on a partnership negotiation, to understand what your MoSCoW is:

Must Haves → Non-negotiable needs

Should Haves → Important but not necessary

Could Haves → Desirable, nice to have, but not necessary

Will not Haves → Least critical wish list

Using this method, you focus on the really important needs of your business.  With this understanding you will quickly be able to assess whether a potential partner is going to accompany you and help you deliver your goals. For example, if they are unwilling to give you your ‘Must Haves’ then you must assess whether they are the right partner for you and worth the time and resources you are spending on them.

If you are negotiating the financial part of your partnership, then assess and hone in on your LIM:

L → The number you would LOVE to get

I → The number you INTEND to achieve and will negotiate very hard to get

M → The number you MUST get or you will walk away

This number is significant because it will allow you to deliver the project that you have in mind with some contingency either for things going wrong or for trying out innovative solutions which you and your team develop during the project’s lifetime.

Understanding these initial parameters will allow you to outline a basic Term Sheet or Heads of Terms.

This document is legally non-binding, usually short (two pages is ideal), and covers the following general topics:

Purpose → Why is this partnership forming?

Intellectual Property → Ownership, licences, commercialisation and management of IP.

Governance → Who are the responsible people for the project, what meetings will take place to oversee the project, how often do these meetings take place, what happens when things go wrong and how to escalate.

Deliverables → What are the milestones of the project and the timelines to achieve them.

Finances → Who pays what and when.

In-kind contributions → What are the non-cash contributions of each partner? These could be staff time, use of commercial products of the partners without charge, access to proprietary information and products, or other valuable but not cash-based provisions.

Governing law → Which country’s law will be applied if necessary.

It is a really good idea to put a brief Term Sheet, together and negotiate the basis of the relationship before drafting legal agreements, as it encourages everyone to think about the really important factors for the partnership and sets the tone for the bigger and more detailed legal agreement.

In the long run, your early efforts in putting together your MoSCoW, LIM and Term Sheet together will reward you with a partnership that is based on mutual understanding and growth.

Why are some start-ups more likely than others to attract partnerships?

When it comes down to it, human nature dictates that we look at business partnerships in much the same way as we consider personal relationships. 

That is to say we consider:

Compatibility

• Do they have the right attitude?

• Are they good for me?

Growth

• What are they bringing to the relationship?

• Would they help me deliver my goals?

Personal gain

• What do I get out of this?

• Is this an attractive partner?

• Are their finances good?

• Would I be embarrassed to be seen with them?

Before you even consider contacting every company that may have even a remote relevance to your activities, consider what it is that you want from a partnership.

• What are your goals?

• Where do you see your company in 5 to 10 years?

• What resources are you missing in your company and how can a partner provide these resources to help fill the gaps?

• What resources are you willing to put into the relationship?

It is only when you have these answers that you should contact potential partners and start conversations. You need to have thought through what it is that you want to gain from the potential partners before you contact them.  This way when you start your discussions you will be able to have a coherent conversation about your future growth together. Do not be surprised when they ask the inevitable question “why did you get in touch with us?”. Saying  “I thought we would be good together” will only get you so far; after that tangible business needs and wants will have to be discussed.

Being prepared before having the first discussion also says something about the way your company operates. 

It tells them that:

• you are not a time waster;

• you do your homework; and that,

• you have aspirations and a strategy to achieve them.

These are important deciding factors when compatibility is being considered.

Team compatibility is another crucial factor to consider.

We can list numerous examples where companies have walked away from a partnership as soon as they met key staff in an organisation. Present the best of yourselves in these meetings, both in how you interact and how you react in the meeting. Show interest in what they are saying and presenting. Ask questions relevant to the topic being discussed. If you do not put the best of yourselves on display, you are unlikely to be the partners they take to the next level of preparing for a partnership, which in the case of big companies are big committees and even more senior people. The people you meet in the first meeting would not want to risk their own credibility by promoting your company or innovation to higher powers, if your team is not a fit.

Be prepared to have difficult conversations. 

You may need a confidentiality agreement to enable you to make certain business issues clear and find out how they can help you overcome obstacles.

Do not shy away from asking them why they answered your request for a meeting. 

The fact that they accepted means they thought there was an added value for them. Find out how you can help them reach their goals. In the spirit of being prepared for these meetings,  find out about the latest acquisitions and technologies of their competitors and discuss how your technology could fill those asset gaps for them.

Ultimately the compelling nature of your technology and your team are the key attributes for a desirable partner. If your technology and/or your team are either not relevant and timely or not good enough, then you are likely to hit roadblocks at every turn, no matter who you meet.

This week's newsletter is the last in the current series looking at board effectiveness. Here we provide an overview of boards that we worked with to help them improve their effectiveness and perform better for their companies and share/stake holders, using the guidelines outlined in our previous newsletters.

1.   UK based social enterprise – “Co-A”

We started working with Co-A in 2020, not long before the start of the Covid-19 pandemic. Co-A is a social enterprise working to provide employment opportunities to people with disabilities.  Co-A was created in 2018 after a charity that had originally set up an employment project for disabled people decided to close it down due to a lack of resources. Co-A had achieved some success in its first two years, with contracts agreed with some of the UK’s financial institutions for work to be carried out by their team, but the enterprise was not performing as forecast.

We were originally brought in to assist management with re-forecasting and business planning, but it quickly became apparent that a lack of diversity – of thought, experience, and skills – was stopping the board from performing effectively.

The board had recently appointed a new Chair, from outside the sector, as the former Chair had retired. The new Chair was open to our view that improving the performance of the board would have a positive effect on the performance of Co-A and asked for our input.

We began by conducting a board skills and diversity assessment. At the same time, we carried out an exercise with management to understand what the executive team felt they needed the board to do and the skills required. By comparing the two studies, we were able to see the gaps between expectations and reality. Supported by the Chair, we were able to convince the board that a two-year process of renewal was necessary, in order to replace and improve the board’s membership, while preserving corporate memory. Using board role descriptions and board member person specifications, we launched a recruitment process and in two years, Co-A had a new, effective board and had not only survived the economic impact of the pandemic, but thrived, growing by over 50% per year. Co-A is now performing strongly and is continuing to offer well paid work to people with disabilities throughout the UK.

2.   Germany based biotech start-up – “Co-B”

We started working with Co-B in early 2022. At that time, Co-B was six years old, and had attracted around €11 million in Series A funding.

We were initially engaged to help build their sales team. In discussion one evening with the two founders, the topic of board membership came up and it became evident there was an issue that needed to be resolved to help Co-B flourish.

Similar to many start-ups Co-B’s funding had come with strings, the main one being that all the investors had insisted on a seat each on the board. Add in the two co-founders and you had eight male board members with little diversity of experience. The CEO of Co-B, who was also a minority shareholder, tried to dilute the investor voice by adding more independent members. However, they exclusively added people from within their sector. To use an analogy, their situation was a little like “supersizing” at a fast-food outlet. Yes, your meal is bigger, but really it’s just more of the same.

Another consideration was that Co-B was soon to launch its “Series B” funding round, and it was acknowledged that the board would have to change. The question was, would this be a change for the better, or yet more of the same. New investors usually require a seat on the board, which may well have resulted in an investor-only board. In our experience, investors are mostly capable and experienced people, but rarely do they meet the main criteria for a board member: relevant, diverse and independent. The best board members are strategically engaged but operationally and financially distant, without a conflict of interests.

Independent board members are critical — to deepen perspectives and find new ones, for conflict resolution and building bridges, mentoring and, most importantly, bringing in a set of diverse viewpoints.

We spent time discussing the board with the individual board members, generally one-to-one. What emerged from these discussions was very interesting – the board members knew that they were not the most effective or appropriate people to be on the board of Co-B, but they were concerned about the impact on Co-B if multiple board members stood down before a funding round.

We devised a rolling process of board member replacement, but also were able to convince the board to limit the number of seats available. The new-look board has two seats for investors, one for the founders, and five independent members, including the Chair. There is an Investor Committee, where all the investors meet with the Chair and CEO, in order that they can understand and question the performance of Co-B and therefore can assure their organisations of the continued value of their investments.

We continue to support the board at Co-B as the start-up continues to evolve and grow.

3.   US based renewable energy start-up – “Co-C”

Co-C is a very new start-up, consisting of the three co-founders. Co-C is a spin out of an academic institution and has received support from the institution to create the start-up.

The co-founders had previously created a start-up based on their research and IP but had a very negative experience. This has led, understandably, to a reluctance to cede control and caution about bringing in people from outside their direct circle.

We were originally approached by one of the co-founders, who knew one of our US based associates. The co-founders wanted advice on how to build a board for their start-up that would allow them to avoid the issues that had arisen in the past.

We started by drawing up a skills analysis for the board, which allowed us in turn to create board member role descriptions and person specifications. We then devised a recruitment process that allowed the co-founders to really engage with the candidates. By exposing the founders to the candidates (and vice versa) early in the process, we were able to start to build trust and confidence, which resulted in Co-C appointing a board with not only the right skills and experience but the right “fit” for the founders. It is still early days for Co-C, but they are progressing well under the guidance of a highly effective board.

One last thought

In all our interactions with organisations of all shapes and sizes, one key element has been at the core of all the issues we have been asked to resolve – communication.

Communication between executive and board. Communication between Chair and board members. And communication between board members. This last is often the one that is overlooked, with board members rarely if ever interacting outside the scheduled board meetings. Most of the issues we are confronted with come down to poor or non-existent communication. If you want your board and your company to perform better than you can imagine, our best advice to you is get your communications sorted.

We hope you have enjoyed our newsletters about board effectiveness. Keep visiting our website for further information and look out for our next newsletter series beginning next week.

Boards can play a transformational role in the growth and development of a business. While there is no “one size fits all” version of a great start-up board, the very nature of the start-up model allows its board - within the legal and ethical framework of the start-up's environment - to be whatever it needs to be in order to succeed.

The measurement of the value of a start-up board is different to that of a large multinational, as benefits such as support, guidance and access to broader professional networks are preferred to more traditional strengths in governance or legal accountability. The question therefore is how to effectively adapt these characteristics to the fast evolving nature and challenges of a start-up’s trajectory to success and size.

Independence = essential

When a founder or CEO struggles to relinquish control of their start-up, having an independent chair on the board is crucial. When the role of CEO and chair, or Founder and chair, becomes blended, as can happen in newer start-ups, it can hinder a business by encouraging an inward-looking thought process rather than fostering critical analysis. Being a CEO can be a lonely place, (I speak from experience), so it is essential that an independent chair develops, mentors and guides the CEO in their role, drawing on their own experience and perspectives.

With that in mind, the right chair needs to be willing and able to dedicate time to the CEO. True support and valuable coaching cannot be provided by a chair who is not present, so a strong commitment is non-negotiable. Someone who will dedicate at least four days a month to companies in their portfolio is ideal - this allows enough time for complete support during challenges like funding rounds, commercial growth or acquisition deal management.

Objectivity should also apply across the board. Board members cannot make important decisions without being challenged, due to the problem of group-think, yet only 25% of European Union start-ups appoint an independent, non-executive director (NED). A NED is not linked to other members of the board, nor do they have pre-existing connections with the organisation - so they are more likely to be reaching conclusions without bias or influence. In addition, appointing a NED is a great opportunity to diversify beyond the boards' existing skill set by reaching out to external networks and unrelated sectors.

Appoint board members via a formal recruitment process

In the European start-up sector, 60% of start-ups report not having a formal recruitment process for board members, while over 40% do not remunerate their board members with salaries or an equity share. By not running a formal recruitment process, you risk missing gaps in skills or knowledge needed to support your board, stunting growth and other opportunities. Our previous newsletters covered board recruitment in more detail.

Sourcing board members through personal networks like friends, family or former colleagues can be damaging not only to your business but also to your relationships. When you limit potential candidates to only your connections, you run the risk of becoming indifferent to an extensive network of skilled, connected candidates with the potential to support your business growth.

As your business grows and more funding is raised, major investors often expect to become board members. However just because your business is scaling up does not mean that your board needs to grow too. Start-up boards are generally smaller than well-established organisations, with on average between four and seven members, including ex-officio members.

To ensure your board is providing the most value to your business, it must be deft and nimble. Using your board member skills audit process, review the board every year to consider if the capabilities of your board members are aligned with the next growth phase of your business. Best practice would indicate that shareholders take a back seat in board appointment decisions.

Carry out a full review of what your business needs from a board. Do not rush this process, it will pay dividends in the future. This review will inform the outcome of your board skills audit and will help you to ensure that potential board members have the right capabilities to match the needs of your company. As a last piece of advice when recruiting - if you want the best people for your board, be prepared to offer remuneration, whether salary or equity. It does not have to be a lot – modest sums can suffice - but it is good practice.

Be prepared

A business should hold at least five formal board meetings a year to focus on strategy and growth - they should run for one to two hours depending on your funding stage. At times you may need additional meetings, but five is the absolute minimum to allow the board to contribute meaningfully to your success. Formal meetings help set the rhythm of the business during the year.

To gain the most value from these meetings, the CEO must ensure the board receives reports from the core functions. It is good practice for your executive team to attend and present on their specific areas of responsibility. The board will gain confidence through regular exposure to your team. Preparation is essential to deliver strategic insights to the overarching business objective, backed by market commentary and data points on how your business will continue to grow and adjust. The best CEOs ensure a clinical approach to implementing the boards' needs and desires, always aiming to respond to their minimum requirements while providing additional relevant insights.

As a founder or CEO, it is your responsibility to present both good and bad news, so you must send a detailed agenda and supporting papers for each agenda item before any formal meeting to give the board notice on what to expect. You must give at least five working days for the board to read and reflect on the papers, so that they too can prepare for the meeting. Allowing board members time to consider their responses benefits the CEO too, as any advice or decision-making will be better considered and expressed.

The European start-up ecosystem is vibrant - but with 30% of start-ups reporting that they would not choose the same board again, there is significant room for improvement in board recruitment and operational best practices. Ensuring the right people are around the table for various stages of your business' growth takes time, energy and tough decisions - but the return on investment is well worth the effort, as trusted advice is invaluable.

Next week, our newsletter will give some personal insights based on our collective experience of boards, as executives, directors and advisors to a variety of boards.

Our newsletter last week looked at board role descriptions. This week we will look at the other key document you need when changing or adding members to your board. This is the board member person specification. Like a person specification for an employee, the board member person specification should detail the essential and desired qualities you are seeking for your new board members.

Remember that any board works best by having a diversity of people, experiences and skills around the table. Group-think – the phenomenon whereby people with similar backgrounds begin to think in similar ways – can be an issue especially for startups, where often the board consists of founders and investors, with no independent voice.

So, in order to find the right people to create an effective board, you need to understand what it is you need, what you already have in place, and what is missing. You need to do a board skills audit.

How to complete a board skills audit

Strong boards have board members with a mix of professional skills, personal experience and different perspectives. The ideal combination depends on your company's mission and strategy.

A board skills audit can help you:

• Understand your board’s current mix of skills and experience.

• Identify the gaps in your board and highlight the skills you need to prioritise for your next board member recruitment.

The audit can also be useful for succession planning and preparing for the future: it can show how you may be affected if a board member leaves, or your company faces new challenges.

When to do a board skills audit

Boards often do a skills audit before they recruit board members. However, it can be helpful to complete the exercise every year because it prompts board members to reflect on how their personal expertise has developed and identify new areas of interest they want to explore. The board can respond more quickly and easily when the need to recruit board members arises – and a skills audit can flag if a new board member would add value even if recruitment is not planned at the time.

Completing a board skills audit: step by step

You can complete this exercise in a single board meeting or undertake it in stages.  We can provide a template board skills audit if you require it.

1. Identify core skills and experience needed

There are generic skills that boards need. These will vary according to the size of the company. You will also need to add those that are specific to your company.

2. Identify the challenges and opportunities facing your company

As a board, agree what key challenges and opportunities the company is facing in the next 3-5 years. Draw on your strategy, operational factors (for example, the need to move premises), and external factors such as government policy or climate change.

3. Agree what you need from your board for the future

Highlight the skills and experience you will need on your board to navigate your specific challenges and opportunities. Add to your list of skills and experience if they are not already included in your skills audit.

4. Assess the skills and experience your board has

Ask your existing board members to fill in the skills audit with their skills, knowledge and experience. We suggest the following scoring system:

• 3 = Significant experience and expertise

• 2 = Some knowledge or experience

• 1 = Interested in learning more

• 0 = No knowledge or experience

Some groups typically underestimate their expertise, and others can be more generous to themselves. It is essential that the scoring process is fully explained in detail to assist people in scoring themselves more accurately.

You could complete the assessment:

• by board members individually completing a printed or online skills audit.

• by the Chair as part of a 1:1 discussion with each board member.

• as part of a board meeting either as a whole board or in smaller working groups.

Collate the results and discuss them with the board. Do the results accurately reflect the expertise and skills of the board as a whole?

5. Identify the gaps

What are the gaps between your current board and what you need for the future? Will this change because of existing board members standing down? Prioritise the list of gaps based on the company’s challenges and opportunities. It is helpful to record why you need specific skills and experience. Avoid referring to specific job titles so that you do not inadvertently exclude people with relevant skills.

6. Think about other types of diversity

Good board member recruitment is about recruiting a diverse board. As well as thinking about the range of professional expertise you need, you also want to consider your board members’ diversity of experience, of economic, social, geographical background, and so forth. Do not forget that many studies show that gender balance is a critical factor in creating an effective board and having a successful company.

Using your board skills audit

Your board skills audit will show you what skills and experience you need on the board, what you currently have, and where there are gaps. Combine these findings with your analysis of your diversity gaps and agree the range of skills, experience and characteristics you want to prioritise for your recruitment. Use this to focus your role description and any publicity, so that you target people with the skills and characteristics that you need. It will also help you to decide how many new board members you should be looking for, as you might need more than one person to bring in the skills sets and experience you’re missing. The skills, knowledge and experience you are missing go into your ‘person specification’ for new board members.

If you want further information about board role descriptions, board skills audits and board member person specifications, please contact us.

Our newsletter next week will touch on some specific advice on building an effective board for startups.

In previous newsletters, we have looked at the process of bringing board members onto your board. It is hoped that your board members are now performing effectively. But this may not be the case; indeed, it is often not the case. How do you remedy this? You’ll need to recruit some additional, or replacement board members.

This is not a bad thing. Companies, especially start-ups, develop and change over time, so the required skills and experience on the board is likely to change too.

Having the right people on your board is a key element in ensuring your organisation is run effectively and efficiently. In the same way that new employees are brought on via a formal recruitment process, board members should be too. Yet only 35% of European start-ups report using a formal process. This could mean that companies are missing out on the opportunity to improve their boards in a way that improves overall company performance.

As with any recruitment exercise, it is important to consider what role the board members will have, and the skills, knowledge and experience they need. This newsletter highlights the key requirements for effective board members and shows how these can be developed into a role description.

A role description sets out:

• The purpose of the role, and

• The main duties associated with the role

Who is responsible for developing the board role descriptions?

In general, the Chair of the board should lead the development of the role description for board members. Support could be sought from the company secretary, or whoever fulfils this role in your organisation. As your company evolves, the roles of the board members might evolve too, so a periodical review process should be developed too to ensure that the role descriptions remain fit for purpose.

What is typically included in a board member role description?

The main role of the board is to ensure that the organisation acts within its remit and within the law, and that it achieves its objectives.

This means that the board should be tasked with:

• Acting within the powers of the company as set out in the company’s constitution document (this might be the Articles of Association, or the Founders Agreement or some other document)

• Providing strategic leadership and ensuring effective governance

• Promoting the success of the company, for example by leveraging personal networks, supporting the executive team in key fundraising meetings, or advocating on behalf of the company when appropriate

• Holding the management team to account for company performance

• Exercising independent judgement

• Exercising reasonable care, skill and diligence

• Avoiding conflicts of interest, declaring where there may be conflicts of interest

• Not accepting benefits from third parties

In order to fulfil these requirements, a typical board member role description might include:

1. Legal requirements:

• To act in accordance with the law and within the power of the company’s constitution document

• To act in accordance with all other legal requirements, such as health and safety, data protection, employment laws and any other regulatory requirements

• To act in the interests of the shareholders

2. Provide strategic leadership:

• Ensure that there is a clear vision and strategic direction for the company and that the strategic objectives of the organisation are in line with the objectives defined in the company’s constitution document

• Regularly review progress toward the achievement of the strategic objectives

3. Ensure effective governance:

• Ensure policies and procedures reflect best practice and keep the organisation compliant with the law

• Ensure that the company adheres to the policies and procedures

• Ensure the sound financial status of the company

4.   General:

• Attend internal and external meetings and events as required and contribute fully and effectively

• Ensure ongoing personal and professional development to reflect changes in best practice (covered in our newsletter #3)

Note that this role description is not exhaustive and should be augmented with your own organisation-specific elements.

The role description is not the only document you should produce before starting to recruit board members. It is often used alongside a person specification, which sets out the skills and experience required to carry out the particular role. Our newsletter next week will look in more detail at how you should go about developing the person specifications for your board.

Last week, we briefly touched on the need to induction new board members as they begin their term on your board. This week we will consider what needs to be included in your induction programme. This list is not exhaustive and should also include elements specific to your company and sector.

This list summarises what you may include in your induction programme and suggests who in your company should produce/present the information. It is strongly recommended that all elements of the induction take place as soon as possible after the board members are appointed and definitely before their first board or sub-committee meeting.

1.      Welcome

The board members should have an initial welcome and introduction to the board and the executive team. This should be with the Chair of the board.

2.      Governance 1

New board members should receive an explanation of the function and services of the company. This should include the history of the organisation, its vision and mission, its ethics, values and philosophy, the structure of the board and sub-committees, departmental structure and hierarchy, and a glossary of company-specific terminology and jargon. New board members should also be offered a tour of the site if logistics allow. The Chair of the board and/or the CEO, should take these meetings.

3.      Governance 2

There should be an initial discussion about the contribution to the board required from each board member. This discussion should also include an outline of the board member appraisal or review process and an analysis of any training needs required by each board member. The Chair should take these meetings.

4.      Governance 3

New board members should be provided with all policies and procedures relating to board member expenses, conflict of interests, code of conduct, standing orders, risk management, audit and finance and whistleblowing. These documents should be presented by the Chair of the board and the Company Secretary (or whoever fulfils this role for your company).

5.      Governance 4

New board members should be provided with copies of all relevant meeting notes. These should include the board and sub-committee meeting dates, copies of the last 12 month’s board and sub-committee minutes, and brief pen-portraits of the other board members, along with their contact details. These should be presented by the Chair of the board supported by the Company Secretary.

6.      Internal Relationships

New board members should receive introductions to all senior staff with an outline of each functional area of the company. This should be carried out by the Chair and/or the CEO.

7.      Strategic Planning

New board members should be provided with a copy of the latest strategic plan. A discussion should be held to consider progress against the plan, and any current issues. The Chair of the board and/or the CEO should take these meetings.

8.      Finance

New board members should be provided with a copy of the latest annual report and accounts, and a copy of the most recent budget report. The Chair of the Audit Committee (if this exists) or the Chair of the board, supported by the Finance officer, (or the person in your company responsible for producing the accounts), should present these documents.

New board members will want to contribute to your organisation as quickly as possible. A well thought out induction programme will help them learn about your organisation, its operating practices, challenges and opportunities. You’re giving them the information they need to be able to contribute effectively in as short as possible timeframe.

What is the purpose of the induction process?

An induction programme is a structured way of providing new board members with the information they need to be confident and effective in their role. You should also give them access to support during the process. The aim of the process is to help new board members to understand the organisation, and their role in the organisation’s success.

What is involved in an induction process?

An induction process could last for a day, a week, a month or even a year. It depends on the size and complexity of your organisation. It should include:

·        Welcoming new board members, introducing them to the board, executive team and other key people.

·        An introduction to the business plan and the financial position of the organisation.

·        An introduction to the governance framework that is in place. That is to say, the respective roles of the executive and the board, and the decision-making, reporting and oversight functions within the framework.

·        Meeting with key stakeholders if relevant.

·        Reviews with the chair to confirm understanding, identify issues and encourage further development.

What are the steps involved in developing an induction programme?

This may seem obvious, but it is important that the induction plan is in place before the new board members begin. Doing this helps present a professional image of your organisation and is reassuring for the new board members.

An induction pack should be produced, containing all the key documents required by board members. It is the responsibility of the chair, supported by other board members or the CEO and executive team, to take each new board member through the pack in its entirety.

In addition to familiarising the new board members with the documents, the induction should introduce them to the culture of the organisation and their role and responsibilities as a board member. It is also an opportunity to identify any training and development needs to ensure the board member can contribute effectively to the organisation.

For more details on the content of the induction pack, see our newsletter next Friday.

Is your board working effectively for you and your executive team?

Are you struggling to decide what you want and from whom on your board?

Do you need a bigger board, a refresh, or root and branch reform?

Here are some ideas to help you develop an effective board.

How do I develop an effective board?

You develop an effective board by asking the meaningful questions continually – and then finding the best answers for a particular time in the organisation’s existence. For example:

What value is your board adding?

Does the board have a shared vision with the executive team?

How do we deal with differences of opinion?

How do I ensure the board has the right blend of skills and knowledge?

You need to understand what it is your board is being asked to do, what decisions it is making, and how these will change in the future. Remember that the board is there to challenge as well as support you, so just appointing like-minded people is not necessarily the best answer.

How do I ensure continuity as board members change?

Board members should be inducted into your company, just as you induct new team members. The content of the induction should be relevant to the role.

I