Nurole guide for early-stage companies: The vital role of the Chair

When it comes to building a start-up board, the first hire is usually an independent Chair. It’s vitally important to bring in the right person who can help take your business to the next level. They’ll play various roles, all of which can have a huge impact.

• A good chair will act as a mentor to the CEO, developing their leadership skills and challenging them where necessary.
• They will review the company’s strategy and make sure the executives are focusing on things that really make a difference.
• They will mediate between investors and founders in the boardroom.
• They will define the culture of the board, from the way meetings are run to the way challenges are addressed.

So choosing the right Chair really matters. But who do you choose? How do you structure the relationship between founder and chair? And what should the chair be bringing to the table? We spoke to two pairs of founders and chairs for their insights into this all-important dynamic.

Will Parry, CEO of Altido

Who to hire?

In terms of what we were looking for, it wasn't immediately obvious. We had ideas, past experiences and we’d spoken to people but it was still a bit of an unknown – what's it actually going to be like? How will it change the business?

I pushed it to the other co-founders because I felt that leadership was messy, and that we had rule by committee. We had five founders, all in their 30s, all male. The idea was to move away from having a sort of a quasi board, quasi management team, and shareholders all in one horrible mix, and move into separate structures where each one of those bodies is interacting with each other differently. None of us had ever really done that at scale, so we needed someone who had done that to come in and help us.

Clashes are good

I wanted to bring in a chair to make things more uncomfortable. She needs to really challenge us, and Barbara definitely does that. So there are clashes, and we've seen them already. And I think that’s the point, because there is a lot more accountability.

Getting the most out of meetings

Barbara and I meet every Wednesday afternoon, for up to a couple of hours. It’s the one time within the week that I can vent a bit and let go of a few things. I can be very honest, much more honest than I’m able to be with some of my colleagues. I can get some of our thorniest problems out there, and she helps put perspective on it, and suggest very practical solutions.

After our meetings I will email her a summary of our conversation, reiterating what I’m going to focus on. It’s that accountability again – so we know that we are moving forward.

Barbara Anderson, Chair of Altido

Understand what’s really happening

You need to understand the tensions, in terms of the founders’ expectations and find out what they really want. Sometimes entrepreneurs – especially guys in their 30s – aren’t strictly honest with themselves about what they want to achieve.

Provide them with permission to step back. You might need to say, look guys I know that you're super busy. But things aren’t going to fall over if you take three hours out of your day. And believe me, it’ll pay off in the long term. So let's take the three hours, we'll sit in a room all together and we’ll talk about what type of business we want to build. Because that ultimately determines what we do today. Let's throw out all those things which don't take us on that journey.

Start with governance and strategy

The first thing to address in early-stage companies is the lack of governance. They're just winging it until they get to a certain level and that's natural. So it’s about getting enough governance in place that the right decisions are taken in the right way and that the strategy is supported.

By strategy, I mean a set of ideas and hypotheses that are backed up as far as possible and routinely tested as you go. You can’t end up in a vortex of a million ideas – you need to have a set of priorities, and if something doesn't work out, you change those priorities. Then you can move forward in a constructive way.

Help the founders get perspective

It’s quite a lonely job being CEO. Will might ring me if he wants to ask something, or I might ring him if I see a piece of data, or something that surprises me. Even if it's just to say, look in this period, we'll have a drama every day. That's normal – it's tiring, but it's the way things are. Things get good when we’ve only got a drama every month.

Pay can be a problem

Getting the right balance around remuneration is really difficult because it usually involves dilution and option schemes, which people don't fully understand. So they always say no. But it's getting people to buy into the idea that if you want to grow, you need to hire the right team. That’s worth paying for. Otherwise you're going to end up with a very big share of something very small, as opposed to a slightly smaller share of something potentially quite big. Are you backing yourself or not?

Matt Warren, Founder and CEO of Veeqo

There may be some scepticism 

We’d taken an investment from Octopus, and it was one of their requirements that we have a Chair. It wasn't something that I had any experience of, and I was a bit sceptical. But speaking with the candidates I realised this could be useful, as a bridge between the board and the management.

We’re a SaaS company, and so I thought it would be very beneficial to have someone who’d worked with other SaaS companies. Someone to tell us if we’re on the right path, from tactical things like conversion rates on free trials to what kind of retention rates are good. It can be quite hard to know in our industry how well we’re doing.

See the chair as a critical friend 

It’s good to see a chair as a mentor. You have to balance that with the fact that they’re there to challenge you as well, in a board setting and on a personal growth level. That’s critical. But if you respect a person, you think they're smart, and what they're saying is a good challenge, then that stuff is fine.

Embrace formality

As soon as we got Octopus as an investor, we had to ramp up our board meetings, how formal they were, the cadence and how much we prepared for them. That happened pretty much overnight. And then when Martin came in, he added another 30% on top of that. He changed the way we structure and prepare for the meetings, making sure that we’re raising the most strategic topics rather than just running through the numbers from the previous month.

Focus on the long term

Martin really helps me think about the big picture because he's not in the weeds. So if I speak to him once or twice a month, he isn't aware of 90% of what's going on in the business. And his thoughts and questions will be at a strategic level, which then drags me out. He’ll ask really pertinent questions from a very high level, and it helps you remember what we're trying to achieve.

Martin Fincham, Chair of Veeqo

Personal connections are key

Chemistry is vital. I want to fall into a flow so whether you're agreeing or disagreeing, you're sparking off someone. And they’re listening. Even if they're being robust, which I generally prefer, it's being done in the spirit of trying to understand the other point of view.

Humility is important

You need to find a willing partner. The best advice comes in the form of asking good questions, challenging the rigour of thought processes and sharing your experiences and networks. It doesn’t mean having all of the answers.

If you've achieved a reasonable amount of success, such that people are actually interested to listen to what you have to say and pay you for it, that's the ticket to the game. But you’re only as good as your last exit. That's a healthy mindset – I've seen people stumble where they've maybe swaggered a little bit too much.

There’s no substitute for getting stuck in

Find a way to get stuck in and it changes everything. I'm not looking to impose myself, but I’m as hands-on as they'll let me be, particularly around the sales, marketing and growth functions.

One of the signals that I’m having an impact is when people in the company call me for advice – not only the management team or the CEO. That means they know who I am, it means I’ve got down in the trenches. I’m not just some ethereal figure that they've seen on a press release or something. And secondly I’ve built some sort of rapport with them.

See the role as a privilege 

Your mindset as a Chair is vitally important. I believe that accompanying founders and entrepreneurs on their journey is a privilege. By the time of a Series A/B investment the company will be >£1m ARR (in SaaS) and growing rapidly. Achieving this milestone is no mean feat. This means that we get to work with an elite group of high-achievers. I love smart people. I love to learn. I love the variety.

My best days as a Chair are when I know I helped one plus one equal three. Where we sat down to figure something out, and we found the answer. And I know in my heart, I never would have got there by myself, and neither would they. Those moments are golden.

Conclusion and further reading

The relationship between a CEO and a Chair is often intense. But that intensity can drive real improvements for both the individual and the organisation. Clearly, trust, mutual respect and the willingness to be totally honest with each other are key. If you can build a relationship on these foundations, then you’ll be able to harness your Chair’s experience and expertise.

Further reading:

The Nurole Guide to Building A Start-up Board

The Nurole Guide to Managing A Start-up Board

Why Start-ups Should Hire Outside their Networks

The Best Way to Hire New Board Members

Why Your Probably Need to Shake-up Your Start-up's Board

Nurole provides best-in-class hiring for forward-thinking boards. We blend the power and reach of technology with a very human understanding that every role, every organisation and every candidate is different. Contact us to discuss your next hire or find out more about becoming a member here.