Does Your Startup Need a Board of Directors?

Typical role of the board of directors

• If you hope to attract outside capital, or if you are considering selling your business at some point in the future, the board can be crucial in reaching a successful outcome. It can also help your company with corporate governance issues.
• The board usually has the authority to appoint and replace your company's senior management, including the founder/CEO, if necessary
• The board can guide you and protect top management. You get a forum to discuss issues that you cannot talk about with others at the company, such as matters concerning employee performance and so on.
• The board ensures accountability by the top management. It sets goals for them and holds them accountable for meeting those benchmarks.
• The board can take care of strategic planning for your company. It shapes the management of the firm and makes adjustments based on the long-term vision of the company, if needed.
• The board members’ business contacts can help you get customers, leads and suppliers for your business.
• A board can help you with succession planning.

Disadvantages of having a board of directors

• You will most likely have to relinquish some control over the direction of the company.
• You may have to incur extra expenses in order to set up a formal board of directors. Such perks as salaries and allowances may need to be offered to attract experts to sit on your company's board. And because board members may face personal liability as a result of their work for the company, you may have to buy liability insurance for them.

Authors

Neha De

Neha De is a writer and editor with more than 13 years of experience. She has worked on a variety of genres and platforms, including books, magazine articles, blog posts and website copy. She is passionate about producing clear and concise content that is engaging and informative. In her spare time, Neha enjoys dancing, running and spending time with her family.