According to Douglas Battista, Board of Director members should have an extensive range of expertise in an area that will serve the company well. As an example, a company may wish to point a financial advisor or lawyer to the board.
Leadership experience, specifically in the company’s field, is important for all board members. Douglas Battista explains that individuals with a history in technology, for example, will lend value to a tech startup as they typically know the ins and outs of the industry. They will also have contacts and prior business acquaintances that may bring value to the company as consultants or new employees.
Time, energy, and commitment are also important. Douglas Battista notes these individuals should have a vested interest in the company and have the resource of time available to commit to attending meetings, reviewing information, and discussing decisions with his fellow board members. While it’s customary to compensate board members for their time, travel, and related expenses, the average compensation for a board member is approximately $36,000 -- persons asking for considerably more may not have the best interest of the company at heart.
Douglas Battista notes that board members should be void of any potential conflicts of interest that could affect their decision-making. As an example, a board member should not also own another company that profits from the actions of the board in which they are a member. This could entice this board member to sway decisions that are in the best interest of him or herself and possibly not the company as a whole.
Finally, while certainly not a requirement, the most effective board members are those who have experience raising capital. This could be to help a startup carve their spot in the industry or for an existing company to complete expansion initiatives.