How much understanding of risk management should your board members have?

Looking for that expertise, credibility and relationships to complement the board composition is not an insignificant task. The complexity of the choice, needs and approaches is primarily directly linked to growth stage - understandably early-stage start-ups will face different considerations when compared with pre-IPO fintechs and mature incumbents.

For fintechs specifically, regulatory requirements will greatly influence the makeup of boards, as it is the case in Europe and compared to the US, where there is a greater appetite for executives with non-financial services backgrounds, such as technology or marketing. Single-tier and double-tier composition of boards mandated by corporate governance stipulations in different fintech jurisdictions may also play a role.

You are understandably on the lookout for the right mix of diversity to avoid groupthink and help you steer the business where various backgrounds generate the righ balance of focus. This includes risk - board members need to have a good understanding of risk management, even when they lack expertise in that area.

But just how much understanding?

Start with those fundamental questions:

• Have your board candidates previously defined an oversight role for a financial technology startup?

• How aware are they of the regulatory and compliance frameworks you are subject to, and have they been exposed to jurisdictions you will be operating in?

• How forward thinking are they with regard to fostering risk culture and risk intelligence? How knowledgeable are they building teams that understands the value of risk management in a technology environment?

• Have they been exposed to appraising risk appetite in a rapidly evolving and - more often than not -data and analytics poor environments?

Between founders, employees, investors and independent/non-executives, board composition matters, as it reflects the blend of vested interests and experience driving the future of your venture.