Choosing the right people for your board

NuevolutionNuevolution Posts: 30subscriber Bronze Level Member
Hello everyone.I was just asked this today by a customer of mine and i would love to get some input from the community.here is the scenario, she is young, been a soleproprietor for a few years, but now wants to Incorporate. her question to me was "How do I choose my board of directors" Although, I gave her a few answers to think about. I would love to hear from you guys. How do you choose your board of directors, and what is the key component to look for? Please help me find answers for her.Thank you

Comments

  • NuevolutionNuevolution Posts: 30subscriber Bronze Level Member
    I did mention NOLO to her. See, she wants formality I guess.. She doesn`t want to be the only one in her board, she wants 4 people, what she is concerned is whether the people she picks are capable of delivering. I hear what you are saying. But honestly, I don`t know if you are Inc. But I had the same troubles of finding who was fit to be in my board of directors. In the end I chose Close friends with High Ranking and High Educational background. But Honestly, you can`t just choose your drinking buddy...if you drink.... Honestly how do you know who is right.. that is the question... Nolo only tells you what you need to do...
  • LogoMotivesLogoMotives Posts: 15subscriber
    When my sister incorporated her business she simply listed the people she trusted most as members of her board of directors.  None had actual stock in the company - but served in more of a business advisor capacity. She selected our Dad, her accountant, her attorney and her banker.  Her biggest concern was in regards to the future of the business should something happen to her and she was unable to continue to run the company.  The individuals selected would be able to handle the situation in such a case.- J.
  • DavidDavid Posts: 3subscriber
    A growing problem these days that many corporations face is making sure anyone serving on their Board of Directors isn`t serving elsewhere in that same capacity.  Not only does it create a potential conflict of interest but it`s usually not a good idea to hire someone who is already minding someone else`s shop.   Typical exceptions to this rule are retired businessmen with "star power" (Warren Buffett serves on multiple boards at many top corporations, for example) or board members who own actual stock in the corporation.
  • NuevolutionNuevolution Posts: 30subscriber Bronze Level Member
    David,Warren Buffett is an exception, I think that what he gets paid per year, he can afford good lawyers that protect his interests...
  • DavidDavid Posts: 3subscriber
    That`s exactly what I said.  If you`re trying to get a board for a small but growing company, try to get people who buy in (literally) to  the entrepreneurial vision.  Otherwise, you`ll wind up business-minded investors who will jump at the first liquidity opportunity and convince everyone to sell.  I`ve heard so many horror stories where an entrepreneur who spent years building a company had it yanked out from under them because the board didn`t believe in the company.
    What did your friend decide on for her board of directors?
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