Prominent CEOs Weigh in on Best Practices for Engaging with VC-backed Boards

Chief executives can take strategic steps to ensure venture-capital-backed boards have the right people with the right experience to help start-ups and growth-stage companies achieve key milestones and avoid serious pitfalls. Likewise, said a panel of CEOs from private and public companies, it makes good business sense to ensure that board members remain well-informed, fully engaged partners throughout the company’s life cycle. Speaking to a gathering at this year’s Michigan Growth Capital Symposium on Wednesday, four C-suite veterans offered insights into several key areas that shape the dynamic relationship between senior executives and VC-backed boards.

Board talent and diversity: “Find wise people who have ‘already done it’ to be on your board and select board-level directors,” said Kevin Conroy, chairman and CEO of Exact Sciences. “Put only one person from the management team on your board.” He suggested setting up an innovation and technology committee within the board to serve as a scientific advisory body that can bring in scientists and experts. “You also need board members with character who will do the right thing,” Conroy added.

Good communications: “It is important to tightly manage the flow, timing and volume of information to the board,” advised Timothy Wadhams, former CEO of Masco Corp. “Boards don’t like surprises, so don’t spring things on them. Give them a heads-up in advance of a meeting. Debriefing after a board meeting is also important.” Wadhams recommended keeping an open dialog with board members outside formal gatherings and ensuring the board is in lockstep with top management. “Bring board members in and make sure they understand new products, including the cost, manufacturing process and other aspects,” he said. “Keep things simple. Focus on what you, as CEO, can control to improve execution and strengthen your brand.”

Transparency: “It’s all about honesty and transparency,” insisted Larry Freed, CEO and managing director of 2nd Stage Partners. “As chief executive, you need to be honest with the board, and vice versa. It’s a two-way street. Build a level of trust, so you can talk about problems before they become problems and your board can help you.”

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