Whether it's the board of a start-up, a family firm, or a closely held company, there always comes a point when you need to crack open the boardroom door and let some fresh air in. Often, the trigger is capital-based, accommodating a major investor or going public - or maybe a board just sees the need to improve its own standards and oversight.
Esther Dyson, boss of tech VC firm EDventure Holdings and editor of the influential futurist newsletter Release 1.0, is famous as a technology guru and writer in such media as Forbes and the New York Times. But she is also a director with many companies, including Cygnus Support, Medscape, and Perot Systems, and brings the sharp eye of a former securities analyst to her duties. Dyson's ideas on how to shake up an inbred or underperforming board?
The new director on an inbred board starts by "pushing the board to confront issues, even before they're ready. Try and make people see reality. I find boards are often too slow to act."
"Start by setting meeting dates well in advance. When the board is three guys and one uncle, the board tends to meet whenever they're all in town. But if they schedule the meeting in advance, there's much better communications in the presence of a new outsider, and they're less resistant to showing their laundry."
This move toward formalizing the board extends to information. "It's as much a matter of collecting the material as putting it on the table." Dyson finds that it helps if management puts together a brief weekly or biweekly memo to board members on matters that are important. "We hired somebody new, or held this sales meeting, or we're negotiating with this new prospect. If the CEO had five minutes to fill me in, these are the things he would tell me."