Scaling beyond the founder: How to grow without losing the vision

Entrepreneurial energy built the company, but board discipline keeps it accountable. As scale-ups list and grow, the hardest governance challenge often isn't strategy, it's turning founder conviction into collective leadership without losing what made it work.

Research that analyses marriages (the Gottman Method) has been equally applied to the psychology of founder-led boards and their transition as the organisation scales or lists on a stock exchange. Both relationships involve high-stakes, shared accountability and the ongoing requirement to work through disagreement with someone you can't easily walk away from.

Susan Forrester AM FAICD has deep history in this space as a chair and non-executive director who has served on founder-led boards, including National Veterinary Care, Catch, Xenith IP Group, Viva Leisure, Jumbo Interactive and Plenti.

"It's not whether founders are good or bad, or whether they have a use-by date," says Forrester. "The traits that build a business - conviction, pace, intuition, resilience - are often exactly what a scaling company still needs. The task is to take them on a journey as the company scales up, to make sure you harness that energy. It's maturation, not confrontation. A board that arrives looking like an adversary has already lost the room."

Traits for success

Coachability is the one trait that predicts everything and when founders show an ongoing curiosity and a willingness to learn, "that's when you know you can work together", says Forrester.

"The alternative is when they think they know it all and see the board as a necessary evil."

A red flag can be a founder who wants big names on the board purely for the aura it lends to raise capital. Because while going public means more capital, it also brings scrutiny.

Researcher, author and non-executive director Dr Jacki Johnson FAICD says that once you have a broader investor base, "there's an increased requirement for transparency". "Investors don't want the agency issue of the founder holding all the information while they hold none," she says.

"But rather than a board taking something away from a founder, a strong board gives them more of an open field to play in, because transparency and accountability are what let you keep the capital coming."

The real ask of a founder following an IPO is separating "entrepreneurial spirit" (what got you there) from "good governance" (what lets others trust you enough in order to keep investing), says Johnson. Concentrated ownership is the root tension.

"Most IPOs have a large shareholder base still held by the founder/executive team or private equity," she says. "So in the early years, that consolidation hasn't yet happened across the shareholder base."

This can make it hard for others in the boardroom to challenge the people who retain a large share of the ownership of the company. Independence can create problems because it can be hard to hold a founder accountable for bad behaviour. When the chair has a long personal history with the founder, the relationship might not allow for that independent challenge.

"Other directors then stay quiet for fear of upsetting the founder," says Johnson. "Private equity directors with large shareholdings can look like independent directors, but they're not. This can leave minority shareholders with less transparency than the people actually at the table." 

Trust follows respect

The incoming board must absolutely respect what the founder has done. Trust follows on from that. Boards can be tempted to go easy on a "rock-star founder", skipping governance groundwork. However, it's better to apply the same rigour from the beginning, while genuinely respecting what's been built, says Forrester.

"That foundation is what makes direct, real-time feedback possible later - telling a founder their tone was off or that they dominated a meeting," she says. "That's a hard conversation to have. But if you've been building trust and respect, then candour follows."

New director-founders often need the basics spelled out - the board sets strategy and oversees risk and compliance, everything else is management's job. The dynamic differs by scenario. A founder as CEO with a board means learning collective decision making after years of "what he/she says, goes".

A founder moving to a board under a new CEO can often be harder. Guardrails matter, especially against the founder dropping back into the business. Role clarity is important and has to be communicated clearly, including examples of what's acceptable and what's not.

Entrepreneurial companies often haven't codified their systems because they never needed to, so if a founder leaves abruptly, they can take all the tacit knowledge that hasn't been codified with them.

Founders, especially in family organisations, come as a team, or might be best friends. That multiplies the governance challenge - working out who leads, who joins the board and who has become a passenger.

"At one company, the board's message was that an experienced CEO should be recruited to take the business to the next level of growth," says Forrester. "However, significant tension arose when each of the several founders thought that they could do it."

There can be resistance to building systems a founder never had to build. Scaling companies often lack infrastructure, which is invisible at the beginning. In one example, Forrester recalls palpable resistance to establishing an HR function at a newly listed 200-person company. But a proactive board is there to guide the process and support investment in HR resources that can absorb real industrial relations risk, which a founder is no longer equipped to carry.

Forrester is equally wary of over-engineering too early. "Nobody wants a gold-plated organisation in scale-up. You can't afford it and it's too bureaucratic," she says. "The real conversation is calibration - the right governance for now, with a plan for what's added as the company grows."

Skills fit for future

The board's skills gap can become apparent if it's relying only on the people who founded the organisation to take it forward.

Those directors who got the company to IPO stage often aren't the board it needs afterwards. And the skills that got them to that position perhaps aren't necessary for the forward strategy, says Johnson.

Conflict rarely explodes over one meeting. It builds from unresolved role ambiguity. A workable reset deals with substance early, says Forrester.

"Once conflict spills into leaks or public disputes, attention shifts from customers to politics - and value leaks with it. The discipline is disagreeing well, privately where possible, transparently where necessary. Sometimes, our job is half therapy. None of that appears in a governance framework, but it's what makes founder-led boards actually work."

Forrester's test for any board going through this process is to ask what governance model best protects the company's future, while preserving the strengths that actually made it successful in the first place. 

This article first appeared as 'Founder friction' in the Oct/Nov 2026 issue of Company Director Magazine.