Building a 'shoot for the moon' board.

PositionEditorial

Ed. Note: Ernst & Young has released a new report aimed at CEOs of high-growth companies to offer guidance in evaluating the effectiveness of their boards and the quality of their board members. The report is titled, "Shoot for the Moon: With the Right Board, the Sky's No Limit." An excerpt follows.

There are three key questions to ask when considering the composition of your board:

* What experiences and expertise do I need?

* What do I need the board to do?

* Whom should I pursue? The questions overlap. The response to one influences the answers to the others and will also vary depending on where your company is along the path to growth: emerging, rapid-growth, or next-generation market leader.

In the emerging stage, the board of directors has three vital roles to play: Advising the CEO/Founder, branding the new company, and networking. Ideally, the board should supplement the CEO's knowledge. Directors should bring the experience that the CEO (and others on the founding team) might lack, whether it's specific industry domain knowledge, company-building expertise or specific know-how in certain operational areas critical to sound growth. Their skills should also complement the CEO's. For instance, if the founder is an inventor, he or she should look for directors with proven business skills. If your company has been growing by leaps and bounds and hiring accordingly, a director with deep experience in human resources can help you define your systems for attracting, retaining and rewarding the top talent you will need to compete for skills and grow successfully.

The ideal director has a strong sense of how lonely it can be at the top--and the experience to weigh in at crucial points in the company's growth. He or she expects some bumps in the road and accepts the potential for failure. As Lars Bjork, CEO, Glik Technologies Inc., notes, failures often equate to success down the road: "Those who have experienced failure and success can really advise high-growth companies."

At the same time, potential investors will also be looking at whom you're able to bring on board. It's important to strike a balance here: on the one hand, you want to look for luminaries and visionaries, people who have a personal brand that can be extended to help grow the company. On the other hand, you need people who have the time to take on the job. The board can also be an important source of contacts with potential customers and sources of supply. For instance, if...

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