By JD Sherman, Volition Capital Strategic Advisory Board Member
This past spring, I spoke on a panel at Volition Capital’s Annual 2025 Leadership Summit when someone in the audience asked an interesting question: “We just had a new investor join our board, and they’ve asked me to put together a set of KPIs to measure our performance. So, what is a good set of KPIs that I can use to measure their performance?”
It’s actually a great question! The interaction between boards and management is definitely a two-way street. Over my career, I’ve seen this relationship from both sides. I’ve been a CEO, COO, and CFO, and often thought “our board doesn’t get how hard this is!” I’ve also served on multiple boards, both public and private, and often thought “Why won’t the CEO just listen to us?” So, I’ve given a lot of thought to this dynamic over the years.
A great place to start is to understand the role of a board. The role certainly varies under different circumstances (and when I talk about roles here, I’m not talking about fiduciary duties). In general, I think a board is responsible for three things:
- Does the company have the right leader in its CEO, and is that CEO getting the support he or she needs to be successful?
- Does the company have a clear, executable strategy, and do they have the resources (team, capital, etc.) to pull it off?
- Is the company executing in a way that suggests they can be successful?
For most start-ups and growth-stage companies, the board is primarily made up of investors who have funded the company. Often in my case, I’m the only independent board member, and I try to work with the CEO to get board alignment around the company strategy. With alignment, a board can be a tremendous asset. Your board will have seen a lot of different companies and their challenges, and they’ll have a lot of connections that you can draw on. So, let’s talk about how to get the most out of your board.
The first thing I always remind CEOs is that they’re in charge! A board filled with smart investors is going to have lots of ideas, and they’ll give them all to you and be 100% confident that they’re all great ideas. As a CEO, you have to know when and how to push back. This is where alignment around the company strategy comes in. Make sure you’ve discussed the strategy with the board, committed it to writing, and – while revisiting it on occasion – used it as your north star. If you’ve done this, it’s fair to say, “great idea, but we’re not going to pursue it because we’re focused on our agreed-upon strategy.” Likewise, the strategy serves as a set of guardrails for the board to push back on the company if it starts to go off course. It’s crucial to have this framework in place to keep every discussion from becoming a one-off rehash of company strategy. Your main job as CEO is to ensure you come out of the board meeting with clarity, not chaos.
With that said, here are a few pieces of advice for how to leverage your board’s strengths:
- Give them jobs. Boards are (usually) dying to be helpful. Make sure these aren’t operational jobs, but boards can help with introductions, recruiting, interviewing, mentoring team members, or deep-diving with you into a particularly sticky area of the business where they have expertise.
- Be open with them on the tough decisions you have and solicit feedback. When you do this, always have a recommended path – it’s not a great idea to bring a list of options to your board and ask them to choose a path for you. But your board is a great resource for thinking through challenges, whether it’s building a team, betting on a product direction, or tweaking your go-to-market strategy.
- Keep executing well. When you execute well and hit your numbers, the board will give you a lot of leeway. But if things start to unwind, it’s fair to expect that your board will want to go deeper into the operations. When this happens, first, do not be defensive. That’s always been the killer for me as a board member and the sign of a weakened leader. Instead, be thoughtful and open about what’s going on, and what you’re doing about it, and again solicit feedback.
Now back to the question: what KPIs do we put on board members? I mean, it’s only fair. It’s hard to hold a board member to traditional KPIs like a CEO would own. But I do recommend that the board members give each other informal reviews occasionally – maybe once every year. This is basically mandatory for public boards, although it’s often done perfunctorily. But a healthy board should be having a dialogue about whether they’re helping their companies grow and succeed, whether their makeup is appropriate, and what they need to do better going forward. That’s more than fair!
