Founder’s Role in Board of Directors
A founder can be a director and be on the board. In fact, they usually are. You as the CEO and the other founder are directors. When you incorporate and create a corporation, the first thing designate board of directors. Starting out the CEO and the other founder are directors. The board of directors has oversight of a startup. The board sets objectives and ensures resources meet objectives.
Importance of Board of Directors in Startups
The direction startup takes depends on board’s decisions like fundraising, who is in C-suite, and budget limits. Board control is one issues for founders as grow. The founders technically report to the board in meetings. The board focuses on high-level decision-making, not day-to-day operations. That’s CEO and management’s job.
Building an Effective Board for Nonprofits
Starting a nonprofit means board-controlled, not founder-benefits. Founders can be board members. When incorporate, first designate board of directors. Boards focus high-level decisions, CEOs operations. Add members as grow. Maintain board relationships for guidance. Effective boards self-regulate, ensure success. Three to seventeen members ideal. States require minimums. Founders earn less than for-profits. Get paid from revenues. Schedule consistent annual meetings.
Adopt bylaws dictating elections, assets. Seek legal help aware of state laws. If seek tax exemptions, ensure bylaws align IRS. Hold official meeting, adopt bylaws. LLCs apply 501c3 status, but IRS restrictive on structure. Recruit diverse, balanced boards with needed skills. Follow basic rules for good relations. As vacant spots arise, carefully approach qualified candidates. Heed advice when inviting leaders.