This is a practical guide to help entrepreneurs and first-time chief executives to form and partner effectively with a board of directors. Forming a board often co-incides with taking on external investors for the first time.

1. Exploring best practices for a first-time
CEO building and effectively partnering
with a board of directors
Kieran Moynihan
( kieran.moynihan@cit.ie )
Entrepreneur-in-residence,
Cork Institute of Technology,
Cork, Ireland
November, 2012

2. Used effectively, a board of directors is
a critical asset to a first time CEO in
driving a successful company

3. Used in-effectively or built poorly, a
board of directors can vary from a huge
waste of time, money and focus to an
absolute nightmare for a first-time CEO

4. What should a first-time CEO look for in
an effective board ?
• Strong chairman
• Pragmatic balance of management,
shareholder and NED members
• Small number of experienced NEDs
bringing industry & management expertise

5. Critical role of chairman
• A strong chairman
– Sets the tone & formality of the board
– Drives the effectiveness of the board
– Balances effectively between management &
shareholders/investors
– Resolves conflicts
– Puts the arm around and kicks the CEO’s ass
as needed in private !

6. Composition of the board
• Once investors come on board, there is a
natural tendency by CEOs to want to pack
the board with “supporters” !
• In addition to the fact that most VCs will
insist on a balanced board,
– smaller boards are generally more effective
– usually CEO and CFO ( or other key CxO )
sufficient from management side
– CEO needs to resist tendency for defensive
mindset

7. Role of experienced non-execs
• Strong effective boards benefit from a small number of
experienced non-execs who bring significant
• Sector expertise
• Management expertise
• Chairmen also use non-execs to help provide a balanced
focus to strategy, key decisions and importantly conflicts
between management and shareholders
• You need non-execs who are
– strong
– strategic
– ask the tough questions
– will roll up the sleeves in a crisis
– Have a cool head in a crisis or conflict situation

8. 7 golden rules for a CEO in a board
Formal & well-organised
Absolute honesty, openness & transparency
Focus : 20% on positives, 80% on challenges & areas
where you need board’s help and creative suggestions
Inspire the board members to want to proactively help
Listen, listen and listen
Continually build confidence in you as CEO
Under-promise & over-deliver !!

9. • Formal & well-organised
– Comprehensive CEO and CFO report package
– Detailed minutes, progress of actions
– Regular scheduled board meetings
• Demand very high attendance levels
• Absolute honesty, openness &
transparency
– There is no other way
– Holding back and spinning difficult news
inevitably leads to trouble and getting replaced
– If in doubt, ask the chairman for guidance

10. • Listen, listen and listen !
– You need to build your own understanding of
each board member’s style, concerns …..
– Board meetings are your opportunity to
maximise the collective wisdom of the board
– You need to spot warning signs of concerns
• Focus : 20% success, 80% challenges
– You need to give board members the
opportunity to contribute by helping in the areas
you need most
– They are well capable of understanding the
good news from the board pack !

11. • Inspire the board members to want to proactively
help !
– An inspired board member will be thinking about ways
to help you outside of the board meeting
– This could make the difference on selecting a key
strategy, helping win a deal or deal with a crisis
• Continually build confidence in you as CEO
• Every board meeting represents an opportunity for
the board to recognise your growth and performance
as the CEO
• With each passing board meeting, your maturity and
confidence growing builds their confidence
• This will be critical to deal with the eventual storms
that come to every business

12. Under-promise and over-deliver !

13. Value of boards in a crisis
• Usually board members have been in similar
crises and have navigated out of them
• Board helps put a structured discipline of
responding to a crisis
• Built-up goodwill is returned to you by a
quality board in times of crisis