Who Should Be on Your Board of Directors?

As your startup becomes a company, it’s essential to establish a Board of Directors—not just as a legal requirement, but as a cornerstone of successful business management. But who should you invite to the Board?

At the SSA’s Founders Day, Startup Board Academy’s MD Virginie Verdon was joined by Dr. Andy Schwarzenbach (owner of BlackRiver and founder of Hitzberger & Startup-Exit.ch) to share their expert knowledge and experience on Boards of Directors.

Virginie explained why forming a Board of Directors can be especially challenging for startups. Beyond the lower priority that founders often give to corporate governance in the early stages, startups face unique hurdles:

Swiss law applies equally to all companies, regardless of size or stage. Startups, with fewer resources, still face the same compliance requirements.
Startups are riskier by nature, which makes directors’ personal liability a serious consideration. (Note: Directors & Officers Insurance doesn’t cover all liabilities.)
Swiss law has no defined concept of “management.” While the board can delegate certain tasks to managers, responsibilities like financial oversight and recruitment of executive management cannot be delegated.
In Switzerland, the board is responsible for protecting the interests of all stakeholders—not just shareholders.

A lively discussion followed, covering key questions such as:

Should all founders be on the board?
When and why should you include an independent director?
How should conflicts of interest be managed?
What’s the right way to handle directors’ compensation?

The expert recommendation: appoint an independent director as early as possible—ideally before taking on investors. Compensation should be monetary (not shares or options) to help maintain independence.

Board directors often wear two or even three hats—manager, shareholder, investor—making conflicts of interest inevitable. This is exactly why independent directors are so important

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Want to know more?
SSA resources:

Education Session Library – Virginie’s presentation from 2023 (members only)
Blog summary of the session

Startup Board Academy offers training programs that equip board members with the knowledge and tools to fulfill their duties effectively and contribute real value.

And check out our friends at Follow the Gradient—they have a great podcast for newsletter subscribers titled How to Build and Manage a Successful Startup Board, which dives into how to run meetings and engage board members beyond the boardroom.
We invite everyone in our community to stay informed, stay engaged, and help ensure that Switzerland remains a place where innovation and entrepreneurship can thrive.
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