By Sam Smith, Chief Executive Officer on the finnCap Board
CEO of the finnCap Board, Sam Smith, discusses the importance of having a strong company board, and shares her experience of how to choose the right board.
How do I choose my board? Well, I start with what, and who, I value.
I think it’s fair to say we all have our favoured support networks. Whether we consciously chose them or not, everybody has their most trusted advisers, those certain people in our family, friends or social groups who we inadvertently always turn to for an opinion or guidance. Let’s say you were thinking of moving house to a new part of town with your family – is there a cabal of people you would naturally consult in this big decision making scenario? Your significant other that’s doing it with you? Your parents that have done it before? Your best friend? Your other friend who works as an estate agent?
That group of people would be best candidates as your personal ‘board’.
In many ways a board is no different. Sure, it’s a committee that meets to make important decisions on strategy. But in other ways it can be a bit like a family. It’s not a groupthink and we don’t always agree; we might not think the same, we might not even have similar ideas about where we’re headed next, but what is important is we value the same things. We can and should challenge each others’ thoughts and decisions, safe in the knowledge that we can all trust each other to make decisions that are in the interests of the company in the long term. We’re not trying to make short term gains; we want peace, harmony, excitement and growth, and we plan for the long run.
One thing I will say about the family analogy is that while it’s probably fairly accurate in terms of a good board’s dynamics, it does conjure up that old image of a stuffy board made up of the CEO’s actual family members, which is just not true of a good, progressive company. A family dynamic it might have, but its operations are more akin to a council of elders – a group with a wide knowledge base and experiencing in making big, long term decisions.
I was lucky enough to have people like Jon Moulton and Vin Murria in my close circle and as longstanding mentors. We already had both the family dynamic and real-world experience.
Rule number one of forming a board is having people that you not only trust, but that have been there, done that and have the T-shirt. People like Jon and Vin are experienced at giving a wealth of guidance at the highest level, but also, crucially, as former CEOs and C-level managers, have skillsets that complement my own. We are a natural team.
What we also had form the start which really drives decision making is a clear vision for our strategy – our way forward – and clearly set out rules on decisions the board should make, versus those that are the remit of senior management.
But are the dynamics of boards changing? I think there’s quiet change going on at the top of companies, sure.
I’d say data probably plays a big part in this – more and more the board is required to act and make decisions based on bigger and bigger datasets, because there are so many more variable factors we can access at our fingertips. We will probably be reliant more and more on the experiences of, say, data scientists and statisticians at the highest level, so it will be interesting if that becomes a strategic point of competition. I do think a key decision-making factor for the company boards of the future will lie in how we interpret and process bigger and bigger datasets, how we better feed and educate our board members on what the data is telling us, which may mean meeting or communicating far more often, and how the numbers shape the wider strategy.
Ultimately how you structure a board of directors depends on your company needs. If you make it too small, you don’t get that breadth of thinking. If you make it too big, then too many opinions become unmanageable. The key thing is you have a strong group of knowledgeable, trustworthy individuals who can help drive the company forward and they’re all in one room for a relatively short amount of time. Ensuring you get the most out of that time is the board’s most important job.