Sometime last week, I missed a call from one of my close entrepreneur friends, Gboye. Knowing he rarely calls without a very important reason, I returned the call immediately.
“Hey Gboye, what’s up?” I asked. “Sola, it’s time to set up my Board. I need your input. I know you’ve successfully put one in place for your business,” he replied.
That single comment sparked a deep, 30-minute conversation about board formation for small and medium-scale businesses.
Like Gboye, many founders eventually reach an inflection point — the moment they realize that scaling the business requires more structure, governance, and the wisdom of others. Yet, many don’t fully grasp what setting up a board entails or how to get it right.
Based on my experience establishing and managing a highly functional Board of Directors at our SME lending business, CreditPRO Business Support Services Ltd., since 2021, here are 7 practical lessons that every founder should consider while setting up a board for their businesses:
Before setting up our board, I sought advice from a few trusted mentors. One of them was Mr. Kehinde Oyeleke (CEO, Seedvest MFB) who gave me a priceless piece of advice: “Don’t be carried away by big names.” That wisdom stayed with me throughout the selection process.
When selecting directors, prioritize value over prestige. Look for individuals who bring relevant experience, long-term commitment, and strategic networks. If you sense that someone may be too busy to commit their time to your company, think twice before onboarding them.
Your board should reflect a healthy mix — in gender, professional background, and ethnic representation.
An all-male, one-dimensional board is not just outdated, it can be a liability. Diverse boards foster broader perspectives, richer conversations, and more balanced decision-making. In today’s complex and multicultural business environment, board diversity is not optional, it’s essential.
While striving for diversity and balance on your board, don’t overlook the importance of emotional intelligence and interpersonal harmony. A boardroom filled with friction, ego or passive aggression can stall progress and undermine trust. Yes, you need diverse opinions on the board, but you equally need directors who can engage constructively, respect opposing views, and prioritize the company’s mission over personal agendas.
It is important to agree on tenure, expectations, and deliverables before the first board meeting. Founders should endeavour to formalize everything in writing, typically through a letter of appointment that outlines the director’s roles, responsibilities, term limits, and benefits.
This clarity allows you to refresh the board when necessary, manage expectations, and avoid future misunderstandings.
Once a board is in place, you are no longer the sole decision-maker and that can be uncomfortable, particularly at the initial stage.
In the early days of CreditPRO’s board, it felt unnatural to seek board approval for urgent decisions. But with time, I eventually learned that while oversight might slow down certain processes, it dramatically improves the quality and soundness of decisions. It’s a shift from autocracy to stewardship, and it requires maturity.
If you want committed directors, you must show that you value their time and contributions.
Start with basic incentives like sitting allowances, then layer in benefits such as profit-sharing, healthcare coverage (HMO) or club memberships, as long as these are affordable by the business. Remember, people stay committed where they feel valued.
At CreditPRO, we began with sitting allowances and profit-sharing. As the business grew, we scaled up benefits in line with our capacity. This made our board members feel invested — they have real skin in the game.
A board brings with it a new level of accountability. As a founder, you’ll need to report progress, justify key decisions, and sometimes defend your strategy. It’s not always easy, but it strengthens your leadership and builds a culture of transparency, which is crucial for long-term sustainability of the business.
Setting up a board is not just a formality — it’s a strategic decision that demands maturity, openness, and long-term thinking. While setting up a board comes with its own challenges, if done right, it can become one of the most transformative decisions you make as a founder.
Four years into running CreditPRO with a board, I can confidently say: It was one of the best decisions we ever made. The governance, structure, and clarity it brought have been invaluable.
Sola Adeyiga is the Founder/CEO at CreditPRO Finance Company Ltd.
Originally published at https://www.linkedin.com.
