Five Reasons You Need an Independent Director on Your Board

Apr 22, 2016 · 4 min read
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Independents Bring Balance, image by Lisa Zoe

Many interests are represented within a board of directors: the CEO, founder(s) or other senior executives, venture capitalists or other big investors, and shareholders with large holdings. Ideally, each director should look out for the company above all other interests,­ but this may not always happen. Enter the independent director.

An independent director represents neither institutional investors nor the founders and can bring balance to a board. Below are five reasons why every board needs an independent director.

1. Independents are impartial

2. Independents want to be there

3. Independents bring expertise to bolster where you have room to grow

Will Herman, serial entrepreneur, explains in Brad Feld’s book Startup Boards, “Creating and running a startup can be stressful and time consuming . . . Since the outside director should have loads of operational experience and will often have specific industry knowledge, chances are he/she has experienced almost everything the CEO will go through. Who better to listen, advise and counsel?

4. Independents are the key to conflict resolution

Will Herman adds, “sometimes there are just some deep, fundamental disagreements between the management team and the company’s investors . . . Even if the outside director strongly supports one of the perspectives, since they are close to both sides, they are in a unique position to cut through to the core issues and find agreement much faster.

5. Independents can mentor and share their network

Gerry Brown, author of The Independent Director: The Non Executive Director’s Guide to Effective Board Presence, adds that, in times of stress, an independent director should also be someone with networking ability and other resources. “It may be necessary to bring in specialist advisers — strategy consultants, lawyers, accountancy firms, investment bankers, tax specialists, remuneration consultants, head hunters — to help. The independent board member needs to have a network of contacts to assist or enhance these needs.

Find your independent board member today

If you’re ready to add that independent, we’ve got 1,100+ names on to help you get started on your search.

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