Board members tend to have lots of experience in at least one of these three areas: financial expertise, industry-specific knowledge, or operational management. Over the past couple of decades, though, companies have become more interested in diversifying their boardroom—both in race and gender as well as in expertise.
Today, you’ll find individuals with backgrounds in marketing, IT, and human resources in addition to the “classic” board member tracks.
The latest trend, however, is adding someone with an entrepreneurial background to your team of directors, and we’re big fans of this movement.
Here’s what an entrepreneur can bring to the table:
A focus on long-term, strategic thinking
Boards are constantly being pulled between short term goal-oriented oversight and long term, strategically focused planning. Entrepreneurs are generally going to default to strategic thinking and will help pull your board out of conversations that should be left to your company’s C-suite.
Entrepreneurs are often “visionaries” in the business world and offer a complementary element to boards that already favor members who are well-versed in risk management or short term, operational guidance.
This isn’t to say that an entrepreneur will always be right about their theories or suggestions, but their presence alone will force more conservative members to tackle some out-of-the-box thinking.
A boost in stock prices and revenues
According to The Wall Street Journal’s recent board study of smaller companies, research showed that boards with an entrepreneur saw several positive changes: “Their stock prices shoot up more than expected in the days following the announcement. Their revenue-growth rates are higher than those at companies that appoint non-entrepreneur directors.
And a measure of long-term company value moves higher than at the other companies.”
The full summary is worth the read, but the bottom line is clear: entrepreneurs tend to help drive financial success. Although this study focused on boards at smaller companies, you could easily see how these benefits might translate into a larger arena.
An understanding of failure and an eagerness to learn from it.
Many classic-minded board members are extremely risk averse and for good reason! They are tasked with a great amount of responsibility to shareholders and to the overall success of an organization.
Unfortunately, this can sometimes lead them to fear failure in such a way that it stifles success. Many successful entrepreneurs are known for embracing small failures in order to reach large triumphs.
This attitude in support of both flexibility and evolution brings a unique and forward-thinking element to any boardroom. Here’s an article that summarizes some of the most exciting character traits that successful entrepreneurs can bring to your team of directors.
If you haven’t considered seeking out an entrepreneur to serve on your board, now may be the right time! Look for candidates who have experienced a healthy number of failures and successes; they’ll be the sort of people who push your board to consider options and paths that you’ve overlooked in the past.
Sometimes, all it takes is one or two dreamers to create the spark your company needs.