I often meet people involved in business startups who say to me, we know that it would be a good idea to have a chairman, but right now we can’t afford to. One of them came back to me a few weeks later to say, we need a chairman now because a potential investor is insisting that we have one.
So what does this tell us?
- Startup businesses know they should have a chairman
- They say they can’t afford one
- Sometimes an investor forces the issue
- Then they take action
According to the Institute of Directors, 70% of non-executive directors are interested in investing in the businesses whose boards they sit on.
So if you are saying to yourself, I may need a chairman, but not yet ask yourself this:
- Are there issues I am avoiding in the development of my business?
- Am I confronted by the prospect of those issues being resolved by a more effective board?
- Can I afford not to have a more effective board?
- Am I willing to sell equity to get the right chairman?