Follow the Rules
First, consult your Corporate Bylaws. They may recommend or require a certain composition of board members, such as a specific number of people from inside and outside the organization, certain professional requirements, or practical demographic mixes. Those requirements will be your starting point, along with the total number of directors required and how they are nominated.
The Elusive Mix
If the process requires that a nominating committee create a list of candidates, you can make the following suggestions to the committee:
- Look for people who have expertise in a variety of areas. You don't want the board completely loaded with finance types or developers. A representative mixture will ensure that you get guidance in many areas. Diversity usually leads to more well-rounded board decisions.
- Don't stack the board with "yes" people who will just rubber stamp the CEO's plans. While one of the board's purposes is to support the CEO, sometimes providing support may mean saying "no." In the end, the board is responsible to all the stakeholders so they should favor practices that lead to a sustainable, profitable business. This requires candidates who are tough-minded yet fair.
- Once you have a list of candidates, interview them. Review all of the board's responsibilities and duties with them and make sure they have a deep interest in the success of the organization and can devote the time required. The last thing you want is a bored, unengaged director.
- Carefully assess personality types. Again, diversity is key but there is no crystal ball to help the committee find that magical mix of personalities. Combining opposites (such as the wildly optimistic with those who prefer a slow and measured approach) may result in creative synergy or unwanted volatility.
Once you have narrowed the list, you will prepare a final slate of candidates to be voted on by the electing body. After the board is selected, the new directors should immediately elect the officers (unless the bylaws call for another method). The CEO can guide the meeting until the officers are elected, and then turn the gavel over to the chair. There should also be a temporary secretary until the board elects one. Both the temporary secretary and the permanent one should be diligent about taking Corporate Minutes. You can be ready for your very first meeting by using our Corporate Minutes form, and supplying it to the new board secretary. They will likely be relieved by your forethought, as they may be caught off guard by their election.
Now that you know how to select board members, you may be ready to take the next step to incorporate your new business. We provide a helpful comparison chart of the advantages of different entities, such as corporations, limited liability companies (LLCs), and non-profits. If you've already made a decision, you can simply use our streamlined incorporation process to get the ball rolling.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.