The Importance of Trust in Board Dynamics

Perhaps the most important principle of good #boardgovernance at #venturecapital-backed companies revolves around establishing a truthful, trusting, and transparent board culture. If the board culture is poor, then that must be fixed—and fixed fast. The board chair/lead director sets the tone for the culture. A board’s words and deeds need to demonstrate commitment to being an ethical board and operating in an environment of truth, trust, and transparency. I was on a board where poor governance nearly destroyed the company. The cofounder-CEO resisted the input of industry-experienced directors who believed the company needed product launch expertise. He forfeited an opportunity to recruit a world-class, independent director who'd successfully launched disruptive products. He created (& the board allowed) a culture where the board rubber stamped his recommendations. As founder-CEO, he spent millions on a failed strategy, while the board suggested but didn't force a change. It was afraid to confront the facts as they were. Three years in, and almost too late, the board finally terminated him. The replacement CEO rapidly changed the culture to one of #truth, #trust, and #transparency. He quickly confronted the board with the facts re: challenges the company faced. He recruited talented, new personnel and discontinued the failed strategy. He formulated tactics that addressed what the market had been telling the company for years. He provided a realistic timetable and metrics to evaluate execution. The results were quick and remarkable. The company’s credibility and standing were restored and revenues stabilized. The new CEO constantly, with total transparency, reached out to the board, identified issues, and promoted the truth, along with vetted solutions. The CEO was well respected by the market, his team, and his board. The company became a success. Less-than-good examples abound, though. Take (in)famous ones--the Uber board with Travis Kalanick as founder-CEO and Theranos board with Elizabeth Holmes as founder-CEO and chair. By widely available reports, the Uber founder-CEO created a terrible board culture from the get-go, and the board let him get away with it. Eventually, directors dismissed him as CEO, but almost too late. He remained on the board for two more years and subsequently resigned. The board and company recovered and has shown significant growth and sound leadership. As to Holmes/Theranos, the courts determined that leaders were bad actors. The company demonstrated so little truth, trust, and transparency at all levels (board, company, product), for years, that it failed. I can't offer better advice for this most important governance principle than this: go overboard on ensuring a truthful, trustworthy, and transparent board culture. If you feel you've gone too far on truth, trust, and transparency, perhaps you still haven't gone far enough. Kate Garrett Andrew Medvedev Michael Goldberg Joe Breeland Thomas J. Chirillo

If you're already a board member, want to be one someday, or just want to be a good business leader, you need to read this. World-class board members are worth their weight in gold. Here's how the greatest board members set themselves apart: ** They sprint to problems When a company stumbles, great board members jump in right away. “We have a problem, you say? Let’s get on the phone today and do some work!” Average board members let problems get solved -- sooner or later. ** Great board members let the CEO be the CEO. This means remembering who is running and doing things. Average board members will meddle or think it's about them. Great board members know they win when the team on the field wins. Not them. ** Great board members give a shit. They think about the business in the shower. They look for ways to help. They do the work to add value. Average board members? Well, they come to the meetings. ** They have difficult conversations Great board members will say the hard things. Maybe the CEO needs to step up their game. Or a trophy investment is a dog. The board must speak truth to power because the employees usually won’t. ** They read the room Being on a board is the practice of social dynamics. Great board members listen closely to each person. They want to see what makes them tick and their perspective. They use that to craft moves to perfectly keep everyone on target. ** They have a “beginner’s mind” that is constantly curious. While they have strong beliefs, they are always listening to modify them. Average board members have their minds made up. The great ones are growing – no matter their age. ** They know principles are forever, tactics constantly change Board members advise on both. It’s their job. Great ones know that principles are forever (ex. “Delight your customers!”) But that tactics change ("Cold calls work!") They advise with that in mind. ** They build trust Great board members get to know everyone as humans. Not as fellow professionals – as real people! This means spending face time with others to build a real bond. So, when the shit hits the fan, they have mutual trust they can rely upon. ** They work to have skin in the game I worked with a great board member. When she was recruited to the board, she insisted she could invest. She wanted to demonstrate she was all-in with real cash. Average board members? Well, they show up to the meetings! ** Great board members cheerlead CEO is the loneliest job in the world, with no peers inside the organization. They’re alone, fighting to hold the ship together. Great board members must stay optimistic to balance this out. They say "LFG!" and mean it. — This is what I see great board members do that others don't. And what I strive to do for every board I’m on. What did I miss? Give this a like, share, or comment so more people see it. Follow Michael Girdley for more business content ✅

As a board member, I know how challenging it can be to truly support CEOs navigating today’s fast-changing landscape. Spencer Stuart’s latest survey shows fewer than 1 in 4 CEOs feel their boards fully back them — and that’s a wake-up call for all of us. From where I sit, truly supporting a CEO means more than oversight — it means fostering open, ongoing conversations about expectations, challenges, and strategy. It’s about carving out time to focus deeply on long-term vision, not just quarterly metrics. But another critical piece is trust. CEOs need to feel safe sharing tough issues — even personal well-being — without fearing judgment. That requires a board culture built on transparency and respect. If we want CEOs to thrive, we must step up as partners, not just evaluators. #BoardEffectiveness #Leadership #Trust