By Mark Suster for his blog
Many board meetings are bored meetings. Management teams whisk through slides trying to get through a presentation to share how great things are going and they are eager to get through the meeting so they can get back to their real jobs. This is a shame since the value that the right board could add is immense if you select the right board members and manage them effectively.
Yesterday I wrote a blog post about what the role of a board actually is. In short the board is there to represent the interest of all shareholders (big & small) of the company and all other stakeholders (debt, creditors, employees, etc.). The board’s job is to review the company’s financial performance and strategy and help provide counsel to the executive team.
Some boards are highly functional, many are not. Sometimes dysfunctional boards are a result of having investors who don’t really understand their role on the board or have the right skills or experiences to be helpful. Sometimes poorly run boards are a function of the executive team not knowing how to get the most out their boards (and also their investors).
I can’t change who your board members are so let me offer some thoughts on how to make your interactions with your board more productive.
Communicate frequently and proactively
The most effective CEOs that I’ve observed send regular, short, board update emails every few weeks or monthly just to give the board a sense of what is going on. Of course it’s not required and many don’t do it. But I find that the more informed your board is and the more you’re staying on their radar screen the more effective they’ll be for you.
As a starting point the more you’re on their mind the more likely they’re out advocating on your behalf when they are out talking with senior executives at potential customers, future potential investors, potential employees, biz dev partners, journalists and all of the other constituencies where investors should be helping you.
The more you keep investors update the more likely they will respond and try to be helpful for problems you’re trying to solve. The most updated they are the more prepared they are when they do turn up at board meetings. And the more informed they are (thus the less surprised they are if things aren’t going to plan) the more they feel bought in to your company’s successes or setbacks and the more productive they will become.
Keep your updates short and to the point or they run the risk of not being read and also don’t waste your time on too long of updates.
I wrote a much longer post a while back on communicating with investors between board meetings — -> https://bothsidesofthetable.com/how-to-communicate-with-your-investors-between-board-meetings-4835e4b86614
Run board discussions not board presentations
Many board meetings become really long slideshow presentations where management takes the board through pages and pages of financial results and plans. Once you prepare the deck each department that contributed slides feels compelled to get it’s half hour of time presenting their progress. The problem with this approach is that most of this information could be disseminated before the meeting and the time you have with what should be some of your most important mentors is wasted as they turn into an audience vs. counsellors.
Your goal should be to have discussions with your board. As executives you know the details of your company infinitely better than we ever will and you shouldn’t suck us down into the weeds with you. In stead, we can be valuable in that we see dozens of boards and situations and can try to offer helicopter view solutions from what we’ve learned elsewhere. Boards shouldn’t assume that situations are broadly applicable but by introducing views from experience across many companies this should give executives ideas they may not have seen on their own.
I’ve written a more detailed post on how to structure a board meeting — -> https://bothsidesofthetable.com/why-you-re-not-getting-the-most-out-of-your-board-abf9e8b891d9
Run board meetings focus on solving strategic issues
So in stead of wasting your time walking us through financial information we should already be familiar with you should spend your time walking us through a few key decisions you’re trying to make and get our input / debate on the topic.
Boards will only discuss the information you provide them and will mostly get off track if your agenda or your management style allows them to. If you set expectations before a board meeting and get financial information out before the board meeting and understand any issues on the minds of investors before the board meeting your actual discussion will be infinitely more productive.
Remember — it is your responsibility to stop investors who want to get into the weeds and it’s important for the good of all board members. Nothing drives me more bonkers than board members who want to hold dissertations on 409a valuations, product feature minutiae or spend 30 minutes on how many people they know that they can introduce you to. This should all be handled outside the board meeting.
I’ve written before on the topic of how to avoid letting your board members take your meeting down a rat hole — -> https://bothsidesofthetable.com/how-to-stay-in-control-of-your-meetings-2fc40bde82ce
Get financial information out early
Financial information should be sent out 72 hours before a board meeting. If you send a deck and information 24 hours before the board meeting or at 11pm the night before a meeting then you should expect that investors will come unprepared. I always read the deck before the meeting but if I get it 12 hours in advance I certainly don’t have time to do analysis, formulate views, check on facts and so forth and therefore I’m less prepared to add value when I arrive.
Early stage tech startups aren’t public companies so you don’t need to obsess with “having your books formally closed” or scheduling the board meeting only after the end of the quarter. If you’re at that level of reporting you’re probably sub-optimizing your board’s role.
Have pre board meeting calls
I always recommend that founds call each board member well before the board meeting for a super quick update. First, it meets the needs of point 1 — super frequent communication. But secondarily it enables you to walk an investor through the major financial information in advance so they can turn up and be more productive in the actual meetings and focus on strategic topics. Most investors want to enquire about a few operating metics and this type of discussion is less productive in a group setting.
But as importantly is that by having pre-board calls you can run the agenda items by the board member and confirm that these topics are what are on his or her mind. That way they feel bought into the topics when you meet and if they DO have a burning topic on their mind (let’s say their upset about something) — you get a chance to learn about it in advance and come more prepared.
Never be surprised at a board meeting. If you’re surprised at a board meeting it’s on you.
On critical decisions make sure you know where board votes stand before entering the room
Never leave anything important to chance. If you turn up at a board meeting and know that a critical vote will be taken it is your responsibility to “know the votes” before you arrive.
This follows the golden rule of any political decision: you lobby in advance, you count your votes, you modify your positions to build consensus and then you show up to ratify the position you’ve triangulated in advance.
Of course much nuance will come from the group dynamic of discussing the topic with everybody in the room but the key is — nothing should be a surprise to you.
I have a much more detailed post on this if you’re interested — -> https://bothsidesofthetable.com/why-you-shouldn-t-decide-anything-important-at-your-board-meeting-8e02a9de9408
Follow up on post board meeting actions
Many things get decided at board meetings. But also many ideas percolate but aren’t fully decided or require more work. What you do after the board meeting can be as important if not more important than what happens in the time you have together. If you took away actions — follow up. If a board member agreed to take actions, hold them accountable. As with most meetings, much progress is squandered by lack of follow up. I know it sounds obvious. It IS obvious. Yet more people of guilty of this than you’d imagine. It turns out many people are terrible at follow up.
Have as many board meetings in person as possible
There are times when a given board member can’t be in person. It happens. But you should push for as many investors to be physically present as possible and as often as possible. If they need to dial in make sure they’re on a web conference and you can see them and vice versa. When you dial in by voice most people have a harder time being totally in sync with the conversation and are often distracted by other activities. There is no way they’re as productive when it’s just voice. Also, having a well functioning team with a high degree of trust in each other and confidence in each other’s opinions is critical to a successful board. And you simply can’t build relationships on the phone.
Ban the use of electronic devices at board meetings
I know they are “taking notes” for the meeting and “reviewing slides” and materials and need their: laptop, iPad, phone, etc. It is a HUGE MF distraction. I’m usually more able to see their laptops than you can at the front and I promise you — best will the world — they are sneaking a peek at their email, stock prices, web, etc. It’s human nature. Help them be their best selves by banning electronic devices if you want a productive meeting. I recommend you do a 15 minute break in the middle of your meeting and inform people that there will be sufficient time to check in on their email during the break. Obviously there are exceptions if they have something mission critical going on that might pull them away. But this should be the exception, not the rule.
I’ve written more about this topic in the past — → https://bothsidesofthetable.com/why-you-should-ban-laptops-ipads-at-board-meetings-143f896e6669
Allow enough time for a board meeting / don’t rush through it
Some people schedule 90 minutes for board meetings. Maybe 2 hours. Unless you’re a super early stage company there is no way that this is enough time to: Present information, frame strategic options, have informed discussions, agree actions and build important relationships across board members. If you’re trying to “get through your deck” and get back to work then 2 hours is plenty. If you truly want input, discussions and relationships — NFW.
Build social relationships amongst your board members
I am a strong believer in getting board members out for social occasions together. We’re all busy so it can’t be every meeting but certainly once or twice / year you can have a board breakfast, lunch or dinner to build social relationships. These relationships are critical to getting your board to act in concert in difficult times so invest early in building a “board team.” I personally prefer if the board meeting is before the social occasion or otherwise the meal ends up becoming a mini board meeting and the actual meeting feels superfluous. I suggest the meal either be purely social or at least a follow-up discussion on board topics you’ve already debated in the meeting.
There you have it. 11 tips. I’m sure I could keep going. Boards take work. But the best boards are super critical to your success and you get out of them what you put in.