Building a High-Impact Board in a 'Stretched-Thin' ETA Market

A board of directors should hold the CEO accountable and evolve with the company's growth, say veterans of lower-middle-market business building.

In a conversation with Search Party, Megan Webster of law firm Mayer Brown, Max Artz of Peterson Partners and Anthony Walker of Next Coast Legacy share observations about the positive impact a board can have on a lower-middle-market business, and the challenges the Entrepreneurship-Through-Acquisition community faces recruiting board members in a market where top talent is "stretched thin."

Among the key takeaways of the Search Party episode, "Building a High-Impact Board in a 'Stretched-Thin' ETA Market:"

• As demand for experienced, value-adding board members has expanded across the growing ETA community,  the supply of these high sought after individuals has not kept pace, and so ETA investors are having to get creative in sourcing board members from non-traditional backgrounds.

• The right board Isn’t a checklist — it’s a strategic fit. ETA searchers-turned-CEO often seek a mix of roles—industry expert, advisor, peer—but risk treating board building like a shopping list. Peterson’s Max Artz warns against overly rigid templates: “It’s not so much like you can go into a supermarket of board members.” Instead, CEOs should prioritize accountability and character: “I want directness, I want honesty…folks who are gonna hold me accountable.”

• Independent board members bring balance and experience. While capital partners often dominate ETA boards, independent members can offer crucial objectivity. "Independent directors are a wealth of knowledge,” says Mayer Brown's Megan Webster. These independent board members "bring independent viewpoints that are outside of management...and shareholders.” These experienced outsiders can help CEOs navigate crises and maintain long-term perspective.

• Strong boards evolve with the business. Value creation demands different capabilities at different phases of the hold. As Anthony Walker explains, “Our first few board member meetings are usually spent aligning on what are the key leading and lagging performance metrics.” Later, boards become instrumental in strategy shifts, M&A, and exit planning—requiring members to adapt their focus alongside company growth.

• Effective boards require clear communication and trust. Early-stage CEOs may overwhelm boards with minutiae or rely too heavily on retrospective reporting. Artz cautions, “What they should be doing is focusing on the future, being more strategic.” Anthony Walker echoes the need for interpersonal rapport: “We're going to have difficult conversations...you're able to have those more seamlessly when there is a relationship.”

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