Forming a governing body is a big step for any startup. It involves careful planning, vetting of potential candidates, and a good amount of trust. Once all that’s done, though, how do you actually put your board in place? Let’s take a look at a few things to think about when establishing your board of directors.

Who and Why

Have a look through the people you’ve shortlisted for your board. Ask yourself: what do they bring to the group that no one else does? Are they an expert in a field you need expertise in? Do they have experience serving on other boards? Are they impartial and clear-minded when it comes to giving advice? 

Next, you should ask yourself why you need a board at this stage. Is the governance load getting to be too much for you or your small team to handle? Are you required by law to establish a board? Are your investors demanding it? Do you need outside help in areas you aren’t confident in navigating yourself?

It can also be useful to write up a Board of Director’s Agreement document, outlining what you’ll be expecting of someone should they sit on your board. This can help prevent misunderstandings and weed out anyone who is unable to commit to the task.

Keeping these ‘who’s ’ and ‘why’s’ in mind during this early stage of your organisation is paramount to ensuring a smooth and successful transition into having a committee.

What and How

Next, you’ll need to check with your government or governing body’s policies regarding your specific business model. If you’re a not-for-profit, familiarise yourself with the laws surrounding that area. The same goes for startups, small businesses, even student body or sports committees. It’s likely that there’s a lot of rules and regulations you weren’t aware of. Things like fundraising, tax benefits, and state incorporation all have distinct, necessary requirements.

Once you are familiar with all this, you and your board need to draft bylaws for your organisation. These are the internal rules that all members of the organisation, from volunteers to employees to board members, need to abide by. They need to include guidelines on completing governance, due diligence requirements, meeting processes, conflict of interest prevention, term limits, vacancy protocols, board powers, board member compensation, and even more. It’s a lot, right?

This is where having experienced board members helps a lot, as they can help you cover all your bases. It also ensures everyone is on the same page in regards to board duties, compensation, and managerial authority - if someone isn’t happy with your terms, negotiation is smoother when everyone is working from the same base.

Lastly, hold your initial meeting. This is when you will finalise all agreements, give people their last chances to withdraw, bring the board up to speed on the organisation, and begin your governance. 

Establishing a board is slightly different in every part of the world, and there’s no hard-and-fast rules so long as you follow all legal requirements. However, transparency, honesty, and trust are universal, and putting everything in writing and covering your due diligence are the easiest ways to ensure this big, scary, vital step is taken with confidence.