Entrepreneurs often defer to their board of directors in decisions. The question is: should they? In our Insights and Opinions section today, we share the advice of investor Dave Berkus on the topic of: Do you always follow the advice of your board?.
This may be news, but boards of directors can offer bad advice. A typical board is composed of five persons in a company that has received outside funds from professional investors. Two members usually represent the founders or management, two are from the investors, and one is often elected by the four to represent the industry in which the company works.
The financial investors typically have deep experience running companies, often in other industries. The fifth board member often is an expert, but not an executive with operational experience. Realizing that this description is a generalization that fits some, but not all, growing firms, the dynamics of the board are a key component in the effectiveness of advice and leadership given (Continued...)
Read the rest of Dave's advice on boards and their good (or bad) advice.