Perhaps one of a business’s most overlooked assets is its Board of Directors. I say this because a well-conceived and well-represented Board can provide invaluable assistance to any company; either start-up or mature.

For purposes of this column, however, let me talk about the value of a start-up’s Board of Directors.

As is often the case these days, a Board of Directors cannot be chosen casually. I’ve seen Boards selected right before my eyes, in a matter of minutes. (Example: “Well, Tom … you’ve been a great attorney in terms of helping us get organized and set up as a corporation … so how’s about you joining our Board? Oh, and you, too Mike … after all, you really know your accounting.”)

I call this, “Boards by Proximity” --- whoever happens to be hanging around when the company is being formed oftentimes finds himself also on the Board!

Huge mistake.

Boards should be chosen based upon their insights to the industry. They must have contacts in key markets that can be rationally exploited. And, they should include at least one savvy entrepreneur who has been through it before. Someone who can and will help that company avoid some of its more grievous mistakes along the way.

And to those of us who serve on Boards of Directors, be very much aware of your fiduciary duties. In effect, a Board member has a sacred trust. He or she must always act in the very best interest of the organization. Failure to act responsibly can and often does result in painful penalties.

And it is to this end that this column is being written, for in order to provide trustful guidance to an organization, that organization must provide its Board with all relevant facts all the time. By facts, I refer to such things as business plans and strategies, insights into the marketplace the organization finds itself operating in, and of course, the status of any negotiations with suppliers, investors, and shareholders.

In short, a company must constantly apprise its Board of Directors of everything and anything that may affect the well being of the company’s shareholders, customers, and employees. To fail in this fiduciary duty is tantamount to sabotaging the company’s goals and objectives.

I have in the past found myself blindsided while serving on various Boards. This often happens when a CEO “runs renegade” - forging deals and alliances unbeknownst to its Board of Directors. In such cases the Board is presented with a “fait accompli,” instead of a set of well-reasoned choices.

It is in these cases that a Board is rendered effete. For in this instance, the Board is placed in a position of being apprised after the fact. And there ain’t much anyone can do to change history.

So, to the CEO of any organization, I say, “Don’t ever blindside your Board of Directors.” It works like this: first, present your (well-researched) plans for world domination; then, once these plans have been approved by your Board, work them diligently and report back any and all problems you encounter along the way.

Sufficiently briefed, your Board will typically employ its vast experience and relationships with key players in attempting to help you resolve and overcome your problems. Should they not, you have every right to change the constitution of your board by simply adhering to the processes as depicted in your Corporate Charter and by-laws.

But in no case should you ever surprise your Board of Directors with something out of left field (“Oh, by the way, I sold the business the other day and here is the term sheet for your approval.”). For to do so is to violate your sacred trust in the very process that exists to help you maximize shareholder value. (Which, in case you’ve forgotten, is the goal of any company or organization.)