….Beyond the Law. So the short answer is ‘yes, your corporation does need a Board of Directors’- it’s required by law. But let’s get to the more interesting question- ‘who should be on the Board?’ I have read many business plans and have observed many entrepreneurial startups. Experience tells me that a venture with a Board of Directors consisting of management and family or friends is a real ‘red flag’ situation. Usually management has its nose so in the day-to-day short-term firefighting trenches that it can easily miss the big picture forces which can make or break the venture. Having your only ‘outsiders’ being friends or family members usually doesn’t make the situation any better because it either gives you a false sense of ‘everything is going well’ or can degenerate into interpersonal issues which are unrelated to the business. I have another client who I had been after for four years to get some outside board members but he kept procrastinating. Finally he took in some venture capital money and had to have a ‘real Board’. After three months of a ‘real Board’ he not too grudgingly admits that he should have done this sooner.
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