Reimagining the role of boards in high-growth companies to shift from oversight to acceleration for greater impact
There is increasing conversation about boards. What is their role? What is the right balance between financial overview and strategic direction? At what stage does a young company need a board? Who should be on it?
In the ever-changing world of fintech (and in technology generally), a company’s board of directors is far more than a regulatory nicety. It’s a critical strategic asset that can propel or hinder a company’s trajectory. For CEOs and executive teams in high-growth private companies, understanding the nuanced role of an effective board is directly linked to sustainable success.
The fundamental role of the board: beyond oversight
Contrary to perceptions, a board’s role extends far beyond financial oversight and compliance. In the dynamic landscape of technology startups, an effective board serves as:
- Strategic partner – an effective board provides insights, challenges assumptions and offers a perspective that transcends day-to-day operational constraints. The conversations that happen outside board meetings are at least as important as those that take place during them. One of the unofficially documented requirements of a CEO is to build and manage effective, beneficial relationships with each board member and in particular the board’s chair.
- Network catalyst – board members connect executive teams with potential investors, strategic partners, and talent acquisition opportunities. The more diverse a company’s board is, the larger and broader the reach. Yet another reason to support board diversity.
- Performance accelerator – a good board helps the management team refine strategy, identify potential blind spots and navigate complex growth challenges. To be effective, board members must ask the right questions and push the team to tell the story behind the numbers. Three questions are critical: (1) Where are we making money and why? (2) Where are we losing money and why? (3) Based on the answers to the previous two questions, are we allocating the right resources?
The CEO-board chair relationship: balancing collaboration and constructive tension
The relationship between a CEO and board chair is where strategic vision meets operational reality. This partnership requires nuanced navigation, emotional intelligence and a commitment to mutual growth. Research from INSEAD and the London Business School emphasises that effective chair – CEO relationships are built on profound mutual respect characterised by:
- Intellectual partnership – put concepts of right or wrong aside and treat all board interactions as a collaborative knowledge exchange. The UK Financial Reporting Council’s 2022 governance report underscores that high-performing boards view disagreement as a pathway to more robust strategic thinking. Chairs and CEOs often bring perceived power imbalances into interactions inside and outside the boardroom and are reticent to show vulnerabilities, including less than perfect subject matter expertise. Rather than putting up a front, the chair and CEO need to embrace that each has a unique role to play: the CEO to understand the business and actively seek guidance and external views to stress-test the company’s strategy, and the chair to productively challenge the CEO and ensure the right questions are asked (and answered).
- Transparent communication – creating strategic clarity. Move away from the traditional report-out and updating cycle and create a practice of clear, directional dialogue to address the three questions raised above. Update board packs to address governance-related topics (10-15% of content) and how the company creates value (the remaining 85-90%). Add predictive reporting if this is not already in place.
- A collaborative growth mindset – the chair and CEO need to treat strategic challenges as collective growth opportunities. One way to do this is to adopt a continuous learning culture by engaging in regular external expert briefings, implementing mandatory ongoing education programs and hosting structured knowledge exchange sessions. Research from the Harvard Business Review, MIT Sloan Management Review and the Corporate Governance International Journal illustrates that boards adopting a collaborative growth and continuous learning mindset respond 40% faster to market disruptions, generate 35% more innovative strategic interventions and demonstrate higher long-term organisational resilience.
Optimal pushback dynamics
Effective pushback is an art form that requires emotional intelligence, strategic acumen, and mutual respect. It is about constructive challenge as opposed to confrontation. The ideal ratio is approximately 70% collaborative dialogue to 30% strategic challenge. Board members should:
- Question underlying assumptions – assumption deconstruction. Rather than saying “This won’t work,” a board member might ask, “What underlying assumptions support this strategy? What scenarios might challenge these assumptions?”
- Propose alternative strategic scenarios – a critical board role is to push the executive team to evaluate and openly discuss a range of potential futures, not just the rosiest one(s). How would decisions change under these less positive scenarios? What resources would need to be in place to see the company through?
- Request deeper data analysis – when presented with a critical strategic option, for example, an acquisition or market-opening strategic partnership, the chair should ask the Executive team for the options that were reviewed and discarded and for the rationale for discarding those options.
The goal is not to undermine leadership but to stress-test strategies and enhance decision-making robustness.
The board and ESG
The board plays an important role in ESG, driving culture and priorities from the top. By proactively integrating ESG considerations into early-stage business models, boards help companies create long-term value, attract purpose-driven talent and investors, and develop resilient, sustainable business practices that go beyond short-term financial metrics.
As markets and valuations increasingly prioritise responsible business practices, boards that champion ESG become pivotal in shaping not just their company’s trajectory, but potentially transforming entire industry ecosystems by modelling innovative, conscious approaches to business growth.
Refresh cycles: balancing continuity and innovation
Successful companies do not stand still. What a company needs from its board changes as the team grows and develops. Below is a summary of the areas executive teams of privately held growth businesses should focus on when selecting board members. Fundamentally, board members should have experience with where the business wants to be in 3-5 years’ time.
1. Seed to Series A (0-2 years, 1-3 board members, likely investors)
- Focus on foundational expertise – find people who have done this before, ideally at different companies. Early-stage companies need advisors who understand the continual dance between strategic and insanely tactical, who’ve been through the emotional intensity, and who can advise on coping strategies and how to decide whether it’s the right time to leave the day job.
- Identify board members with startup experience – for reasons linked to the above, early-stage teams benefit from guidance on what is real and what is not, how to maintain laser focus when faced with a wide range of appealing-looking options and how to hire well.
- Emphasise network and initial market validation – a board member who can provide warm introductions to (1) potential customers willing to trial the product and provide feedback and (2) relevant potential advisors is invaluable.
2. Series B to C (2-4 years, 3+ board members including at least 1 independent (non-investor) board member)
- Look for scale-oriented board members – identify people who have taken startups from £1m to £5m+ within 2 years, ideally less and for those who have consistently secured full deployments as opposed to pilots.
- Focus on strong financial, customer experience and security expertise – scaleups need to think commercially about the outside world as they move from validating product-market fit to rolling out what they have built to a wider audience.
- Solve for why with an emphasis on purpose and social impact – companies need a clear purpose to succeed in the long term. Purpose positively impacts strategy and is a clear and compelling driver for sustainable growth. It provides an anchor when there are multiple stakeholders seeking to influence direction. Find board members who understand and help define the values associated with the company’s purpose.
3. Growth and Pre-IPO (4-6 years)
- Seek out governance and compliance specialists – while governance in some form is needed from the word ‘go’, governance increases in importance when a company reaches scale and has proven its business model. Find board members with experience navigating complex regulatory environments and a track record of guiding high-growth companies through regulatory complexities.
- Gear up for public market readiness – find people with a deep understanding of public market expectations, investor relations, and the transition from private to public governance structures. They’ll need to be able to navigate the nuanced financial and strategic preparations required for successful public market debuts.
- Ensure the board provides diverse industry perspectives – cross-sector insights help identify innovative growth strategies and potential market expansion opportunities. Board members should have contacts and experience that transcends the company’s immediate sector, offering perspectives on scaling, international expansion, and long-term value creation that draw from multiple industry contexts.
Final thoughts
Markets have their own set of subtleties to navigate. In the UK for example, there is a strong emphasis on having independent directors, a history of regulatory focus on transparent reporting and a growing adoption of stakeholder governance models. The US is typically more flexible regarding governance structures, has a higher tolerance for entrepreneurial risk-taking and a stronger investor-driven board composition. The EU typically has a strong focus on sustainability and metrics, a structured approach to board diversity and comprehensive compliance frameworks.
A truly effective board transcends traditional oversight. It becomes a strategic partner, challenging assumptions, providing critical insights, and accelerating organizational potential. For tech scaleups, the board is not a passive governance mechanism but an active growth catalyst.
By cultivating transparent relationships, implementing flexible governance frameworks, and continuously evolving board composition, companies can transform their boards from necessities into powerful strategic advantages.
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