What Mechanisms Can I Put in Place to Control My Board(s)?


These control mechanisms offer the ability to proactively provide checks and balances, maintain credibility in the event of a possibly embarrassing future ordeal and ensure that directors or advisors have adequate time to contribute and be productive.


startup board

  • Term Limits.  Members should be elected for a fixed number of years with a maximum number of times they can be re-elected.  It may be beneficial to include some flexibility based on member and role.  “Charter members” may be treated differently.  Also, include an exception clause based on board approval in case of specific organizational circumstances, etc.
  • Staggered Board Terms.  Do not have all your members’ terms expire at the same time as this could be very disruptive – especially true if numerous high performing members are all targeted to leave simultaneously.
  • Performance-Based Ongoing Membership & Re-Election.  At a minimum, ongoing membership/re-elections should be withheld from members that fail to meet a reasonable attendance requirement.  Even the SEC requires that companies publish the list of directors that fail to meet 75% of all relevant board meetings.
  • Pro Forma Resignation for Specified Life Events.  Member should be obligated to submit pro forma resignation, which the board can vote on, in cases of major geographic moves, changes in employment (voluntary or involuntary), transitions to new roles which may cause conflicts of interest, changes in state of health, changes in legal standing based on indictment, drug charges, etc.
  • Limit the Number of Other Directorships and “Outside” Obligations.  Limit the number of directorships, and “other” existing and planned future commitments.  Ensure that other obligations do not interfere with the member’s ability to be an effective and active member.

You’ll have less flexibility to implement these across your charter or founding board of directors, but can easily adopt these strategies with advisors and advisory boards.  Remember, the board of directors will likely consist of investors, founders and a single independent (who would likely fall into the “charter member” category).

Reprinted by permission.

About the author: Dr. Jim Brinksma

Prior to founding Visible Arbitrage, Dr. Jim Brinksma launched Business Information Technology Solutions, Shellback Research, and Shellback Labs. He also held positions as Vice President at Goldman Sachs & Co., Sr. Director of Systems Engineering at Ciena Corporation, Sr. Systems Engineer at Cyras Systems, Network Engineer at Enkido, and served in the United States Navy during Operation Desert Shield/Desert Storm.

Jim’s doctoral dissertation at University of Maryland covered “Public Market Signals as a Guide for Entrepreneurs Seeking Venture Capital Investment”. He also earned a bachelor’s degree in Information Systems Management from University of Maryland, completed the Strategy and Innovation Program at MIT’s Sloan School of Management, and completed the Non-Profit Board Leadership Program at Harvard Business School.

Jim has global experience and has provided a range of services to entrepreneurs, venture capital firms, hedge funds, institutional banks, service providers, equipment manufacturers, and non-profits.

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