Matt Blumberg, founder and CEO of our portfolio company Return Path makes a compelling argument for getting a Board of Directors together for your company regardless of whether you take outside capital (and thus are required to do so). Matt says:
Boards create an atmosphere of accountability for an organization, which drives performance (and many other positive qualities) from the top down in a business. Budgeting and planning, reporting on performance, organizing and articulating thoughts and strategy – all these things are crisper when there’s someone to whom a CEO is answering.
I agree with Matt with two big "ifs." The first is if the Board is made up of strong individuals who understand that a Board's role is oversight, not day to day management. There is nothing worse than a Board which meddles. Matt's Board, which I have had the pleasure of serving on for a decade now, is among the best I've ever served on. And so Matt's perspective is based on that assumption.
The second "if" relates to who controls the company. If you control the company and cannot be fired, then your Board doesn't have the thing that ultimately creates the accountability that Matt talks about. Boards that are just rubber stamps are worthless. And there are many out there. I won't serve on one and I would not recommend having one.