How I Learned To Handle A Hostile Board

There was the board member who tried to vote me out. There were the ones who insisted “this will never work.” There was even the one who joked (I think) about having me hit by a bus in order to get rid of me.

For growing startups, a board of advisors can be either your best ally or your worst enemy. It took me a long time to figure out that the difference between the two can be razor thin. It’s possible to turn a hostile board into a supportive one and a rival into a champion. And it comes down to things that are as radical and hard to achieve as they are almost stupidly obvious: trust, transparency, and open communication.

But let me back up. All corporations require boards. If you’re a small company, the founders are often the only shareholders there are, so they determine the board’s composition. It’s when outside investors are brought in that things change. VCs usually earn a seat as part of the terms of their investment, so that they can keep an eye on things.

That isn’t necessarily a bad thing. But the truth is that putting together the right board is complex, and losing control is far from unusual: A study by Harvard Business School found that by the time companies were four years old, just 40% of founder-CEOs were still around. My brushes with near-eviction made me hyperaware of how a good board should function—at a time when mine wasn’t functioning all that well—and what it takes for a founder to play a proactive role. For entrepreneurs struggling to assemble and unify their own advisory teams, here are three key considerations I’ve learned the hard way.

Boards Are Like Families

Like the people you grew up with, you may not get to choose your board’s members but you still have to make things work. Technically, boards have a fiduciary responsibility to make sure management is doing whatever it takes to maximize shareholder value. In reality, though, some board members are so focused on their individual interests as investors that they can’t see the big picture. You may not get to choose these people as CEO, but you have to find a way to bring them together.

When I first discovered that board members were talking behind my back, it shocked me. Eventually, though, I realized I was also at fault for not being open to conversations we needed to have. For me, the key to working through these conflicts ended up being radically open communication. This isn’t always easy, of course, but the CEO can set the tone.

If you share your problems openly, showing vulnerability and asking for counsel directly, board members are more likely to reciprocate. The posturing and bravado falls away, and so do the power struggles. It’s the board members who refuse to get with the program who often find themselves on the outs.

Great Resumes Don’t Always Matter

For board members you do have the power to choose, look past pedigree. Yes, it’s important that prospective board members understand your business from a technical standpoint. But it pays to focus at least as much on their values as on their credentials. Do they believe in the type of company you’re trying to build, or are they paying you lip service? Will they support that vision down the road, or are they just in it for a short-term payout? You want to find board members who are willing to ask tough questions but who do so without ego or an ulterior motive.

It’s also a good idea for prospective board members to have actually seen the movie beforehand, so to speak, and have a sense of which scenes are coming next—that they’ve got firsthand experience with the kind of rapid-growth company, or dynamic industry, that you’re dealing with. With this kind of experience comes the insight to understand what’s actually needed to take things to the next level.

In my case, it was a former board member who had the perspective to know what world-class talent looked like for a company like ours—and the honesty to tell me that somebody I was considering for a job just didn’t fit the bill.

Let Things Evolve, And Make Room For Tension

Conflict doesn’t always spell doom—at least, it doesn’t need to. I’ve found that productive tension is actually key to an effective board. That’s why I try to assemble a diverse group of people, both in the demographic sense (young/old, male/female, etc.) and the philosophical one. You want board members to share fundamental values, but at the same time you need a range of experiences represented in order to avoid groupthink and have tough conversations.

An effective board shouldn’t always be a comfortable place; facing challenges, along with teamwork, is crucial for success. It can also be dangerous to put too high a premium on experience—fresh perspectives are valuable, too. Many countries, such as the U.K., are now experimenting with the idea of mandatory term limits—anywhere from eight to 12 years—to make sure new blood becomes part of the mix on corporate boards. A stale board, at any rate, can fail to see obvious problems just as much as it can overlook novel solutions, which is why I try to bring in new members regularly.

Building a high-functioning board is one of the more important things you can do to grow your company. But for many CEOs, it’s almost an afterthought. That’s a shame because the right board can help you spot some of the curves and potholes along the road ahead that you can’t see on your own. It can guide your company and, at the same time, make you into a better leader and entrepreneur.The wrong board, on the other hand—one riven by infighting and self-interest—can end your journey a lot sooner than you think, either by crashing your company or by throwing you to the curb. So choose carefully.

Jeff Booth is cofounder and CEO of BuildDirect. Follow him on Twitter at @JeffBooth.