As startups grow and reach the scale-up phase, they inevitably encounter the pressure to introduce “proper governance.” This often means bringing in advisory or supervisory boards to add oversight and strategic direction. While this governance is crucial for navigating the complexities of scaling, it’s also where enterprise culture starts creeping in—and if not managed carefully, it can create shadow management structures that undermine everything the startup stands for.
Adding experienced board members or advisors with a corporate background is often seen as a badge of maturity. However, what’s intended to be a boost in professionalism can quickly become a source of friction. Enterprise-minded board members may push for more formalized processes, additional layers of approval, and a structured approach that mirrors the corporate world they come from. Suddenly, the startup’s nimble decision-making is burdened with the same bureaucratic heaviness it was originally designed to avoid.
The problem worsens when this board influence creates shadow management—where key decisions are effectively made by advisors or non-operational board members instead of the people who live and breathe the day-to-day of the business. This not only slows down execution but also sows confusion within the ranks, as teams begin to sense that real authority doesn’t lie where it should. What was once a dynamic, fast-moving organization can quickly devolve into a place where people spend more time managing upward than driving the company forward.
But governance doesn’t have to mean surrendering to these pressures. The key lies in creating a system that preserves the startup’s speed and culture while integrating the discipline needed to scale sustainably. One way to achieve this is by clearly defining the roles and boundaries of board members and advisors. Their role should be to provide strategic direction, challenge assumptions, and offer guidance without stepping into operational territory. They should be catalysts for growth, not roadblocks.
Another approach is to maintain an ongoing dialogue between the founding team and the board. Rather than seeing governance as a compliance exercise, treat it as a conversation focused on value creation. When board members understand the startup’s DNA and the importance of preserving its agility, they’re more likely to strike the right balance between structure and freedom.
Finally, the leadership team needs to hold onto the startup’s core principles, even as it grows. By embracing flexibility in areas where it matters most—like decision-making, experimentation, and innovation—a scaling company can avoid falling into the trap of stifling corporate culture. Remember, governance is a tool, not a goal in itself.
Successful scale-ups manage to marry these two worlds. They take the best of enterprise—strategic discipline, resource planning, risk management—while retaining the relentless energy and adaptability of a startup. It’s about finding harmony between the stability needed to grow and the fluidity needed to innovate. Done right, a startup won’t lose its soul in the process of scaling—it will gain the wisdom and resilience needed to thrive at the next level.