The Best Paperwork For A Board of Directors or Board of Advisors
A board of advisors can help you scale faster, avoid obstacles, and open doors for huge opportunities in your business.
But how do you put a board together?
In this episode, Chris explains the three most important pieces of paperwork that you need to put together for your prospective board.
He also digs into how you can start building your board by starting with the top players in your industry.
Stay tuned until the end, because Chris gives you the link to download his Board Charter template for free.
You’ll be surprised how many really large business people want to help smaller growing companies, and they’re willing to sit on your board if you lay it out properly to them.
In this Episode:
- How many people you need on a board of advisors
- The very first person you should bring on to your board of advisors
- What you need to include in your Board Charter
- The two-page document you need to get prospective board members excited
- What needs to be defined in your Board of Directors Agreement
- How you can get a Board Charter template from Chris for free
Find out exactly what aspect of your company is the current weak link that, if fixed, will help you scale faster and more successfully.
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If you haven’t seen the first few videos on how to build and manage an effective board, definitely watch those next. Because in the first video titled How to Put Together a Board of Directors, I shared how we locate the best people for our boards and how we choose people specifically who can get us to eight to nine figures faster and more predictably. They do that by opening up doors for us that could collapse timeframes. And help us scale faster this year than most companies can in 10 or 15 years.
But to do that, you need to know how to talk with prospects and how to offer them a seat. And what, if anything, to pay them and what kind of legal documents that’ll make this process easier for you. I’ll give you access to one of those legal documents that we use at the end of this episode. Because having access to things like this will save you a lot of time, money, frustration, gray hairs and wrinkles and pretty much everything else.
The Very First Thing You Need to Do
I wish I had this paperwork, this paperwork right here, when we first started my first board. So, let’s say that I’m starting a new company or investing in a company and I want to make sure we get as much growth as possible. Not just in the first few months, but in the first year. I want to make sure that that growth curve continues forever.
The very first thing I’m going to do is put together a board of advisors. On that board I want to make sure I have four to six people who have already achieved what I want to achieve. I want to choose them properly so that each one comes with a highly select skillset and a knowledge source. And maybe a long list of relationships that we could leverage. I say four to six people because that seems to be the number that always works for my companies.
Less than four doesn’t seem to generate enough knowledge that we need to scale. But also the final decisions that we make are usually far better when we have at least four successful people. All mono-focused on growing my company. More than seven, that’s a different dynamic as well. It seems like there are too many people there to get a final decision fast enough from each one of our meetings.
So four to seven, and again, we went over how to do that in the previous episode. But after you know who these people are and you’ve opened up a line of communication with them and you’re ready to approach them and get them on your board, you’ll want to have three pieces of paperwork that will just make this so much easier for you and make it much more clear for your prospective board members.
What You Need to Look for From Your Board of Directors
Before I show you these documents, you need to open up your mind to who might be the perfect board members for you. And don’t worry if they’ll say yes or not. You’ll be surprised how many really large business people, they want to help smaller growing companies. They’re willing to sit on your board if you lay it out properly to them. And that’s what these documents are going to do for you.
Also, keep in mind that there’s a lot of reasons somebody might want to be on your board. They might really be passionate about your mission or they might feel like they’ll learn from the others on your board. Your board members should add credibility to your company. But the very first person you bring onto your board should add credibility to your board. Meaning that after he or she says yes, you can use their name when you approach everybody else.
You might be able to say something like, “Hey, John Doe, the owner of XYZ Bank is also on the board,”. Or, “Jane Smith, the founder or the inventor of XYZ is also on the board.”. In which case others might take a board seat without any pay just to have a direct access those other powerful people. That they probably couldn’t get access to anywhere else except for being on your board. Once you have one person who the other board members consider a big player in your industry, the rest is going to fall into place a lot more smoothly.
Best Paperwork For A Board of Directors: Board Charter
So here’s the paperwork that you need to make that really happen. First is a Board Charter. This is probably the most important document of all the three. Because it’s how you lead the conversation with somebody before they agree to help you grow. And this is where you lay out the objectives for your board and the responsibilities.
If they become a board member and what typical matters of focus will be at each one of the meetings. What their compensation is going to be and how often you’ll meet, where you’ll meet, what time commitment might be on there. And any other really basic things that somebody would want to know before they say yes or no to your offer.
Don’t worry about writing all that stuff down because I’m going to give you this sample charter. It’s going to be completely filled in and it’ll be actually one that we use. We have used this.
Best Paperwork For A Board of Directors: Company History Documentation
The next document is like a one or two-pager that details exactly what your company does and what your company history is and you’ll show them your track record of success in the past and your real-life projections for the future, for the next 12 to 24 months, and you’ll get them excited.
You will design this to get them excited because no matter how well you know or don’t know the person sitting across from you, they’ll want a simple summary that shows them a picture along with numbers of what you’ve done so that they know your track record and what they can be part of for the future if they say yes.
Best Paperwork For A Board of Directors: Agreement
Now the third document is an agreement. It’s the Board of Advisors Agreement. I always keep this short because no one wants to be roped into anything.
Now obviously the agreement for a board of directors position is much longer and it’s a lot more detailed. But for a board of advisors position, it just spells out the relationship. And defines a few key areas like your non-compete and your ownership of IP and compensation and things like that. Now the two really important things to keep in mind here are when you meet somebody to ask them to be on your board. It doesn’t make a difference what paperwork you’re using when you meet them. It’s always best to do that face to face.
So, if there’s a really big name that you’d think could change the game for you and you want them to say yes to you, then locate them. Open up a line of communication with them. Then once you have their ear, let them know you’ll be in town may be for next week or something like that and you’d love to buy them a cup of coffee and then close that damn deal with them. Get them on the board. And you could use that documentation to be super clear on that. And so that they’re super clear on it as well.
Grab Your FREE Template
Check out ChrisGuerriero.com/BOA, it stands for board of advisors, BOA. I’ll have a template, a board of advisors charter, the very first document that I showed you today. I’ll have it put there so you could grab. I understand if your company isn’t ready for a board, then paperwork like this could be overwhelming to you. But if you think you’re ready for a board of directors or a board of advisors, then paying an attorney to create documents like this for your company, that could cost thousands of dollars. I just want you to have it because it could save you time and money. Most of all, seeing what we use in my companies over and over and over again could give you ideas that change the path for you for the better.
Please don’t ask me for all of our legal documents. This is really a great one to get you started. If you want the others, they can go to ChrisGuerriero.com, go to our website and check out the advisory program.
It’s a small handful of companies that I advise and they get access to everything that I have that I feel would help them to scale faster and more predictably. On average, the growth of the people that I work with, the growth of the companies that I advise, they get an average of 210% growth. And that’s just over the last year, right?
So the previous year we had over 200% growth also, in previous year we had almost 200% growth for everybody. So if you’re ready to scale and you’re just kind of lacking experience with somebody who’s done it over and over and over again, who has helped other companies to do it, then check out that program too. It’s a game changer for every company in it.
MEET CHRIS GUERRIERO
Chris is an entrepreneur, investor, bestselling author, and advisor to a handful of high growth companies.
He has built four 8-figure companies, developed winning leadership teams in six industries, and designed business systems that predictably grow multi-million dollar brands.
He’s been featured in financial periodicals such as: Success, Inc, Bloomberg TV, and in Entrepreneur as a top entrepreneurs of the time.
In addition to his own companies, Chris is also an advisor, investor and equity holder in companies across a variety of industries, including health, medical, digital advertising, legal and real estate.