How to Build a Strong Board of Directors (With These 5 Strategies)

About this video

Dan Martell explains how to assemble a productive board of directors that supports the CEO. He notes he does not enjoy boards, recalling Richard Branson telling him during a week in Switzerland that with 400 companies he sits on zero or very few boards because ‘boards are boring.’ Martell has sat on nonprofit board Propel ICT, had boards for his last two venture-backed companies, and currently sits on the board of Pela Case, which he describes as a top 10 fastest growing company in Canada making flaxstic phone cases. His five strategies are: 1) fight for the biz - directors have fiduciary responsibility to the corporation and shareholders, not to be the CEO’s friend; 2) keep it small - use an odd number for tie-breaks, ideally three to five people, three in early days; he recounts a friend who raised over $10 million Series A and was warned after his first board meeting to come with decisions, not just options; 3) value adders only - do not add your lawyer or accountant for free advice, seek people who have been where you want to go; 4) balance the board with an independent director as tiebreaker who shares your values and long-term horizon; 5) equity not cash - investors are not paid beyond expenses, independents typically get equity comparable to a VP level, which he attributes to Brad Feld as roughly 0.2% to 1%, typically half that. He warns to run away if someone asks to be paid to join a board, and promotes his Dream 100 framework of 10 mentors, 30 advisors and 60 peers.

Key takeaways

• Directors must fight for the business, not the CEO
• Keep boards small and odd-numbered: 3 to 5 people
• Come to board meetings with decisions, not just options
• Add value-adders, not lawyers seeking free-advice roles
• Pay independent directors in equity, not cash

Episode details: published August 23, 2021 · 10:44 long. Summary written by Self Growth Videos from the episode itself. Business results and any income figures mentioned are Dan Martell’s own claims, shared for education — they are not typical or guaranteed.

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