Regardless of a business’s evolutionary stage, the owner, founder, and/or lead executive needs a trusted group of advisors. 

Some business owners might prefer their own counsel, wanting to run the company their own way. It’s faster and easier than seeking input or facilitating consensus among a group of people.

While it’s understandable why many owners and founders feel this way, it’s important to recognize that bringing in a board of directors doesn’t mean giving up control or adding to your workload. In fact, choosing the right board or advisor partners should help reduce your workload and improve organizational efficiency. 

A board of directors is fundamental to the development and success of your business, enabling you to access outside expertise, learn from mentors, and leverage your directors’ experiences to maximize your competitive advantage. In short, a board of directors serves as a trusted resource to help you make more informed and better decisions. 

Making the Right Connections

How do you know where to look for skilled professionals with the expertise to provide the guidance you need? 

Before you begin your search, you must understand your own needs: Do they include financial or operational support, human resources expertise, or raising capital? Once you identify your own gaps, you can then start identifying what skills you need to recruit to your board. 

Although the coronavirus pandemic has made it difficult to network in person, there are still many opportunities to make meaningful connections in a largely virtual world. Consider leveraging your peer group, LinkedIn and other social media platforms, to build a board of directors that includes professionals with the relevant skills and background to complement — and when necessary, challenge — you and your management team. 

There are opportunities all around you to recruit quality professionals, and you never know where you will find your next connection. Maybe your neighbor knows someone with executive-level experience in marketing or HR who can help you level up those areas of your company.  

Protecting your Board

Connecting with individuals who have the expertise to round out your board can be a challenge; but so is retaining them. 

Board members have a fiduciary responsibility to your organization, and because you want them to freely provide strategic and financial direction, it’s imperative that you protect them and their personal assets from liability, just as you would protect yourself and your employees.

A straightforward way to manage this fiduciary risk is by purchasing directors & officers (D&O) business insurance, which protects board members from personal liability in the event of any wrongdoing. In addition, you can customize your D&O coverage depending on your organization’s needs. The types of protection, and the cost, vary based on the limitations and exclusions in the policy. Many D&O policies cover costs related to litigation and settlement payments. 

D&O insurance is even critical for startups, as it offers an added layer of protection to safeguard the board of directors, the organization and its employees. Other types of insurance, such as errors & omissions, cyber, general liability, and personal lines to protect your own estate, may also be worth considering — again, depending on your organization’s needs. It’s important to make sure you understand the risks your board of directors may face. Working with experienced insurance professionals can help you determine the types of protection that best fit your organization.

The insurance professionals at HR Benefits Inc., a WTIA subsidiary, have 35 combined years of deep experience in making sure businesses are properly insured. We offer a full suite of commercial insurance policies from best-in-class providers, including custom product solutions for the tech sector. As a tech-focused trade association, we understand how to assess your needs vis a vis the exposure within your organization, as well as how to structure insurance coverages to maximize protection while minimizing risk. 

For more information about business insurance and how WTIA can help you get the coverage you need, contact Tom Price at tprice@washingtontechnology.org.