Tom Burke (Chief Financial Officer of Hydra Biosciences), Joshua Fox (Partner at WilmerHale), Mike Massaro (Chief Executive Officer of Flywire) and Sameer Sabir (Chief Financial Officer of SevenOaks Biosystems) spoke at WilmerHale’s QuickLaunch University on Best Practices for Building a Board of Directors and Board of Advisors. Over several weeks, we will share comments on the topic. This week, we take a look at independent directors.
On the importance of an independent director…
Speaker: Independent directors can be valuable members of a board that has investor-appointed directors. An independent director can empathize with what a management team is going through, even if they don’t always side with management on every issue.
Speaker: An independent director can be a management team’s voice if they have the right operational and/or subject matter expertise, and can add credibility to recommendations of the chief executive officer. When members of a management team have to leave the room while the other board members discuss on certain issues, the independent director can be a voice for the management team.
Speaker: An independent director who has credibility in the industry can bring investors together and help build those relationships in order to make the board a more cohesive group.
On identifying and selecting an independent director…
Speaker: Don’t rush to add an independent director; add one only when their presence is truly needed. It is important to draw a distinction between an advisor and an independent director—the latter can actually make decisions and control the fate of a company. If you aren’t sure about adding someone to the board, bring them on as an advisor first.
Speaker: Once you identify a gap that needs to be filled on the board, that will guide the qualifications you’re seeking in a director. Make sure that you find someone who you are excited to spend time with, someone who fits in well with the rest of the board, and someone who provides the right mix of expertise and credibility. A founder can leverage his or her network to identify this person and build a relationship with them before officially bringing them on as a board member.
Our previous post in this three-part series looked at selecting and managing a board of directors. Next week, we will explore advisory boards.