The number of organizations focusing on quantum computing and technology is growing aggressively and is expected to continue that way for some time. As the business aspects of quantum technology continue to change, the management of quantum computing and technology organizations are faced with a number of strategically important decisions. One area where help, support and assistance are often sought, is from the organization’s Board of Directors. This is a strategically important asset to be sure. Quantum organizations find it a challenge trying to determine if and when the company should create a board of directors – and then properly staff it. Generally speaking, boards of directors are elected by, and responsible to, the founders, owners, investors, and shareholders of the organization.
Establishing a board of directors is a strategic decision that should be carefully considered and not be taken lightly. How do you determine if the time is right to create a board of directors? Additionally, if it is the right time, what is the formula for a board member? There is no one answer to these questions. However, typically, this is driven by the investors and to a lesser extent the near-term strategic direction of the organization. It should be noted, some organizations are stopping just short of establishing a board of directors and creating a board of advisors that fills many of the same functions and provides strategic support. Both, when properly created can provide substantial value to the organization.
When an organization chooses to create a board of directors, the organization’s ‘Corporate Bylaws’ should define the board of directors, their duties, power, procedures and responsibilities. Included in the bylaws should be a requirement for the signing of a conflict of interest statement by board members. Another interesting element that is often a controversial issue, some organizations have begun to set term-limits for board members – just something you might want to consider.
Here are some noteworthy attributes for board members:
- A demonstrated passion for the core business focus of the company.
- Ability to commit between 4 to 5 hours to their role / company per week.
- A demonstration of appropriate professional skills, knowledge and experience.
- Ability to stay up-to-date and provide their own opinion, support and stewardship.
- A commitment to fulfilling their duties with integrity and the company’s interest in mind.
- Knowledge to analyze and steer the organization into the future via the vision and strategy.
- Willingness to sign and adhere to a non-disclosure agreement that extends beyond their role on the board.
PLEASE NOTE: Given the current state of quantum computing and technology, many organizations that are establishing a board of directors are recruiting one or more board members with experience raising capital to support the organization’s growth/expansion. These are not easy positions to fill to be sure!
Given the early stage of quantum technology business evolution, a board comprised of 5, 7 or 9 members should be adequate. As the company grows or things change, additional members should be added or subtracted in order to maintain an uneven number of board members, this helps to avoid a tie when voting. Please realize that some locations have regulations regarding boards of directors. An increasing number of organizations that are establishing boards are providing director and officer (D&O) liability insurance. Some professional decline any board position without it! This is used to protect the personal assets of members of the board and corporate officers, and sometimes their spouses, if they are personally sued by wrongful acts and or activities while in their role.
It should be noted that adding an independent board member is becoming more common. They provide a neutral voice and often, become the member that resolves hung boards, board disagreements and disputes that sometimes arise between the founders and investors. In addition, they provide independent input, guidance, oversight and strategic vision and are often included when management is faced with major corporate and strategic directional decisions.
This is just another common part of the maturing of the emerging quantum computing and technology industry segment.