As I write this article, I am currently serving as an incorporator for a new captive insurer being formed. As part of this process, the incorporators have been charged with assembling the first board of directors who will assume the responsibilities for overseeing the captive from the incorporators. As a result, we have had some serious discussions on how to build the board for the new captive. To some degree, all new captives struggle with this issue; therefore, for this article I have collected some top tips for consideration when building a board of directors. And, while this discussion is geared primarily toward new captives, even mature captives would do well to consider whether their boards could use some reinvention.
Anyone who has ever served as a board member probably has at least one anecdote of a dysfunctional board. These range from boards that do nothing more than rubber-stamp the decisions of management to others where no consensus can be reached and the board remains hopelessly deadlocked. Other examples are boards where members jockey for position and power and others that spend their entire board meetings looking at historical information. So, if you could create the ideal board of directors, how would you go about it?
- Develop and Articulate a Clear Vision/Mission
Before you even begin to think about recruiting potential board members, incorporators or whoever is serving in this function need to develop a clear vision/mission for the captive. As you interview prospects, this becomes part of your recruitment pitch. Here is what this captive stands for, believes, or wants to achieve. Does this board member believe in the vision? Why would he or she want to be a part of an organization with this vision? Can he or she provide evidence that his or her character is in alignment with the vision? The objective here is to try to assemble a dream team. While this is certainly a lofty aspiration, the more time you put into this effort by crafting a clear and concise vision and incorporating it into interviews, the more likely you are to synthesize a great board.