INSUBCONTINENT EXCLUSIVE:
Mike Volpi is a general partner at Index Ventures
Before co-founding the firm's San Francisco office with Danny Rimer, Volpi served as the chief strategy officer at Cisco Systems
More posts by this contributorMuch has been made about the roles and responsibilities of board members these days
This is especially true in the venture-backed startup world where there is an intimate and complex relationship between entrepreneurs and
With increasing scrutiny and growing pressure for accountability, the role of a board member has been thrust into the spotlight.I was
fortunate to begin my service as a board member early in my career
traded companies and everything in between
As I reflect on those experiences, I first have to express my deep gratitude to all the CEOs, management teams and boards that I have had
That said, I have found that a board member can create value in a way that transcends the specifics of each company and its leaders
I write this post to try to abstract the essence of this very privileged role and share my experiences with a broader ecosystem
I also hope this can serve as a guide to entrepreneurs who are selecting investors and constructing boards.In that context, it is important
to realize the peculiar nature of board directors
Our role, as such, is to help the company create greater shareholder value
The role of the collective board is to be an advisor to the CEO and the management team, which, in some corner cases, is called upon to
encourage changes in that management team
of the relationshipIn venture communities, we often oscillate between two extreme views of the role of a board member
In extreme cases, that has even led to the abdication of voting rights and governance to the founders and CEO
While this view is tempting in an era where founders and CEOs are the decision-makers for which VCs they elect as investors in their
But, is an entrepreneur simply purchasing a brand and adding a helper or are they genuinely deriving shareholder value by having a blind
supporter on the board?The opposite extreme is the view that a board member should instruct the CEO and the management team on how to run
This relationship is also fraught with risk
CEOs, founders and management teams are far more versed in the business that they are operating than any investor
They know the internal details, the nuances of the business, the products, the market and the competitive dynamics
By and large, they are far better equipped to run the business than any board member could be.I have personally found that the healthiest
relationship between a board director and the CEO is one that is peer-like
view on the state of the company, its challenges and its opportunities
In doing so, the dialog that occurs will be one which is genuine in nurturing the company rather than a cat-and-mouse game or a
Their perception of the business is often an amplification of the current state of the business
The highs are often more optimistic than the business might really deserve and the lows are often much lower than they should be
The board should reflect a snapshot of the reality of the business
All businesses, both the most successful and the somewhat troubled, involve a lot of sausage-making
Sometimes, reminding the leadership teams that they are neither the masters of the universe nor a losing locker room makes all the
While entrepreneurs have the deepest knowledge of their own business, they do not have the benefit of having seen many other companies that
Especially in the startup universe where there are so many common patterns that recur regularly, the ability to provide the comparative
These recurring patterns exist in almost every aspect of a business
are lessons that a new business can learn, both positively or negatively, from others who have walked in their shoes earlier on
Not all of those lessons apply
But, for the leadership of a company, being able to compare and contrast the situations with those that have come before can be of enormous
value in shaping the right business decisions.It is also incredibly important for boards to encourage long-term thinking
Most management teams think their job is to deliver the short-term quarter-by-quarter gains to appease the board
For company leaders, it is particularly more tricky because their own business is right there, staring them in the face
The journey of a board member often spans many years, sometimes more than a decade
many successful companies he has been involved with as anecdotes to help steer the CEOs to the right decisions
The success stories have a powerful sway on the thinking of CEOs and they are rich in context because they demonstrate actual case studies
Networks exist in almost every context to help recruit the right people, to construct impactful business development relationships, to
provide strategic advice or deliver customers or investors
The list of valuable networks is endless
A board member should come equipped with those networks and generously and tirelessly provide entrepreneurs with access to them
Board members should be able to tap into these networks at the right time (careful not to over-expose startups to networks that are
premature, or useless in the moment)
And, these networks should be fresh and relevant.One of the beauties of rich networks is that they often provide access to the person that
is best suited to give the best advice to the entrepreneur
With a good board, the right person is always one call away.The master of the universe of networks is Reid Hoffman
His ability to bring just the right person into the dialog at just the right moment is amazing
He is truly as good as they come.What happens in betweenFeedback during board meetings is actually a fraction of the ways in which board
members should provide value
In fact, a board member that surfaces only at the board meetings is shirking their duties
The meetings themselves are valuable because they represent an opportunity to bring together the collective thinking and contrast views, but
can have continuity and consistency achievable only in the context of a 1:1.The most effective board members have multiple conversations
with their CEO and executive team in between board meetings
This allows them to be current and relevant to the company rather than getting caught up in the usual business platitudes that are
commonplace in board meetings
Without fail, Bill would always be there
He took context to a new level
What all that context gave Bill was an incisive ability to understand what the real issues were and how they should be addressed
He truly became a coach to the CEO.Availability and relevanceStartups are real time
Issues surface every day and every moment
A board member should have the availability to respond to entrepreneurs when needed
Sometimes that means calls at 10 pm
At other times, that means five or 10 text messages in a day
At other times, they are not pivotal
However, they often provide the CEO with the ammunition to make a tough decision, or simply the ability to offer a moment of empathy
be heardParticularly with VC-rich boards, I have found that all-too-often we enjoy hearing ourselves talk perhaps a bit too much
Sometimes, the quantity of airtime is confused with value
A board member should recognize that their counterpart can only absorb a finite amount of insight at any given time
My rule of thumb is a board member can, at most, provide two or three key insights at a board meeting
And, perhaps most importantly, they need to be delivered in a way that the message is heard
intelligent questions that they can pursue
Ownership is much easier when the idea comes from the CEO
So, the concept of delivering a message well is often to let the CEOs come to their own conclusions rather than spelling out what they
This is often more true with experienced operational leaders
The rest they can figure out themselves.My best mentor in this dimension is Andy Rachleff
artThe more I serve on boards, the more I appreciate the responsibilities and demands that come from being a board director
Board membership is a privilege and a nuanced responsibility that can have a transformational impact on businesses
Sometimes investors, independents and entrepreneurs forget this
Likewise, board members should not view board membership as a list of icons on their LinkedIn profile, but as a subtle yet massively
impactful role they play in the creation of great businesses
When these relationships function properly, the two parties become true partners in the entrepreneurial journey.
