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Building Your First Board: Why Good Governance Isn't Just for Big Businesses
HGA Takeaway
Building Your First Board: Why Good Governance Isn't Just for Big Businesses
A good board shouldn't add layers of bureaucracy. Done properly, it can give founders better decisions, greater accountability, fresh expertise and the support they need to take their business into its next stage of growth.
For many founders, the word "board" can sound like something that belongs in a much bigger business.
But building a board isn't simply about becoming more corporate. It's about surrounding yourself with the right people, creating space for better decisions and making sure the business has the skills and perspectives it needs as it grows.
In this session, Nick Sturge MBE explored what governance really means, the different roles founders play within their businesses, when to start building a board and how to make that board genuinely useful.
A board shouldn't be something you create simply because you feel your business has become big enough. Build it because you know what you want it to help you achieve.
Takeaway 1
Governance isn't just about compliance
When we hear "corporate governance", it's easy to think about rules, reporting and making sure everything has been done correctly.
That's certainly part of it, but a good board has another equally important job: helping the business create its future.
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MANAGING THE PRESENT Accountability, assurance, oversight, risk and making sure the business is doing what it should be doing. |
CREATING THE FUTURE Strategy, performance, value creation and making sure the business is using its resources effectively. |
Takeaway 2
Know which hat you're wearing
Founders often wear several hats at once. You might simultaneously be a shareholder, director, CEO and somebody involved in the everyday running of the business.
The important thing is understanding which role you're performing when a decision is being made.
Think of the structure like this:
Shareholders own the business.
The Board governs and oversees the business.
The CEO and executive team run the company.
The operational team delivers the work.
Takeaway 3
Being a director comes with real responsibilities
Whether you're the founder of a small business or sitting on the board of a much larger organisation, being a director carries responsibilities.
Act within your powers
Promote the success of the company
Exercise independent judgement
Exercise reasonable care, skill and diligence
Avoid conflicts of interest
Don't accept inappropriate benefits from third parties
Declare interests in proposed transactions or arrangements
Takeaway 4
A Chair doesn't run the company
One distinction from the session is particularly useful for founder-led businesses: the CEO runs the company, while the Chair runs the Board.
A good Chair can be far more than somebody who simply keeps board meetings on track. They can help you build the right board, mentor and challenge you, bring experience into the business and create a valuable relationship with the CEO.
The Chair shouldn't replace the founder. Their role is to help the founder and the Board make better decisions.
Takeaway 5
It might be earlier than you think
You don't have to wait until your business reaches a certain turnover or team size before thinking about a board.
Nick's advice is that it's never too soon to start thinking about what you could gain from one. The starting point isn't the size of your company, but the challenge you're trying to solve.
A board could help if you're...
Preparing to raise investment
Moving into your next stage of growth
Feeling like you've lost some of your purpose or direction
Trying to make the business more resilient
Missing expertise or connections in an important market
Planning for succession or an eventual exit
Planning to raise?
Consider bringing in a strong non-executive director or Chair before you raise investment. They can help you through the process and strengthen your ability to retain control.
Takeaway 6
Don't build a board full of people like you
The value of a board comes from bringing together the right mix of skills, experience and perspectives.
A good board isn't one where everybody agrees with the founder. It's one where different viewpoints complement each other, gaps are deliberately filled and no single voice dominates the room.
Don't start with "Who do I know?" Start with "What does this business need that I don't currently have?"
Takeaway 7
Good boards have a clear purpose
Simply putting experienced people around a table doesn't automatically create a good board. Everyone needs to understand why the board exists, what decisions it owns and where its attention should be focused.
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CLEAR PURPOSE Be explicit about the board's remit, priorities and decision rights. |
RIGHT MIX Bring together complementary expertise and perspectives and actively address gaps. |
ACCOUNTABILITY Make decisions, assign owners and deadlines and make sure actions are followed through. |
Takeaway 8
Make board meetings worth everyone's time
A board meeting shouldn't become several hours of people reading reports aloud or getting lost in operational detail.
Preparation, focus and follow-through are what turn meetings into something genuinely useful.
Improve the basics
Before: Keep papers concise, highlight the decisions needed and send information early enough for people to properly review it.
During: Keep the agenda focused, prioritise strategic discussion and make space for balanced challenge.
After: Record decisions, assign owners and deadlines and review progress at the next meeting.
Takeaway 9
Keep strategy on the agenda
There are plenty of things a board needs to cover, from sales and finances to operations, risk, health and safety and previous actions.
But if every meeting gets swallowed up by reporting on what's already happened, the board isn't spending enough time helping to shape what happens next.
Don't let strategy become the agenda item you only reach if there's time left at the end.
Takeaway 10
Recruit board members deliberately
Finding a non-executive director isn't simply about choosing the most impressive person in your network.
Start by defining what the business actually needs, identify the gaps on your existing board and then recruit specifically against them.
Before appointing a NED, think about:
The skills and experience your business is currently missing
The personality and perspective you need around the table
How they'll complement the people already there
What you expect them to contribute
How they'll be remunerated
How you'll onboard them so they can make an impact quickly
Takeaway 11
Be careful about choosing friends and family
The easiest people to ask aren't necessarily the best people for the role.
Nick specifically highlights the need to be cautious about appointing close friends or family. A board needs people who are able to challenge you constructively, exercise independent judgement and bring something the business doesn't already have.
Comfort isn't the goal. You need people you trust enough to listen to when they tell you something you don't necessarily want to hear.
Takeaway 12
Build the board for where you're going
The people and skills that helped you get to this point aren't automatically the people and skills you'll need for the next stage.
As the business changes, the board should change with it.
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1. DEFINE What will the business need next? |
2. IDENTIFY Where are the current gaps? |
3. RECRUIT Find people deliberately against those needs. |
4. ONBOARD Give them what they need to contribute quickly. |
Put it into practice
Five things you can do now
1. Look forward, not backwards
Assess your board against where the business is heading rather than where it has been.
2. Find your biggest gap
Identify the most important gap in skills, structure or decision making.
3. Improve one thing about your meetings
It could be shorter papers, clearer agendas, more time on strategy or better follow-through.
4. Clarify who owns what
Make decision rights, responsibilities and ownership of actions clear.
5. Think 12 to 24 months ahead
Define the capabilities your board will need for the next stage of growth and start building towards them now.
The HGA Takeaway
A great board should make running your business better, not heavier
1. Governance isn't just compliance. A board should help create the future as well as manage the present.
2. Understand the different hats you wear as owner, director and manager.
3. Build a board around the gaps in your business, not simply the people already in your network.
4. Give your board a clear purpose and make sure strategy has proper space on the agenda.
5. Recruit people who can support you and challenge you.
6. Keep reviewing the board as the business evolves. What you need today may not be what you need in two years.
One question to ask yourself
"What does my business need for its next stage that I can't provide on my own?"
That answer is a pretty good place to start when thinking about the board you actually need.