This is the second installment of an eight article series focused on helping early stage investors coach founders on building the best board dynamics they can.
As early stage investors and advisors know, mastering the techniques to hack the board can pay back a CEO’s effort many times over. Helping a CEO prep for a board meeting is super important, but it is a waste if the CEO cannot actually run a good meeting. Well-run board meetings are essential for the success of a company. Here are some tips for running a stellar startup board meeting that you can share with your CEOs:
Running a good board meeting requires staying focused throughout. Both the CEO and her board members are there to have a useful discussion. As noted in the previous article, everything discussed should be for one of three purposes:
- For information – things the directors need to know to do their job,
- For approval - items seeking formal or informal board approval,
- For discussion – topics or questions where it is essential to get people into a room and exchange views and hash something out.
If it is not key information that must be conveyed verbally (i.e. too nuanced for a board package), an item for approval, or something that requires the discussion of the members on this day, it does not belong in the board meeting.
People are natural storytellers. They like to take a small thought and weave it into a long story, make tortured analogies, debate, pontificate, argue and stop meetings to ask remedial questions they should know the answer to. The CEO’s job is to keep that kind of nonsense to a minimum. Stick to the helpful facts, keep the discussion streamlined and don’t allow big personalities to stand up and give testimony. There is a job to be done and not a lot of time to do it in – board meetings are expensive in terms of time and opportunity cost. The CEO should be ruthless about trying to keep everyone on track and focused on pushing into areas where discussion is truly needed and helpful.
Not everyone is an extrovert who likes to throw their views into the mix and think on the fly as they are speaking the words. Some participants will prefer to let others go first while they absorb and contemplate the conversation. Your CEOs should make it a habit to seek their voices out. Don’t let the fastest or loudest voice have the last word. Suggest the CEO reach out to the quieter voices in the room and pull those perspectives into the discussion. By calling on people rather than relying on volunteers, the CEO will not only set a tone of participation and inclusiveness, but also may be availing the group of some of the best advice available in the room.
Good, detailed, and complete business conversations do not happen spontaneously. They are facilitated. Without facilitation, conversations can skim the surface, pivot on hunches and fall prey to confirmation bias. Having a valuable conversation requires actively and deliberately facilitating one. Nothing fancy is required, just some structure to ensure balance and thoroughness. For example, when trying to decide between two courses of action, even a rudimentary whiteboard exercise of listing the pros and cons of each option, followed by a simple ranking of the relative weights can drive very marked insights (especially if the conversation is inclusive). If there is a decision tree, don’t make a decision on the first branch – make sure you weigh each option. There are many tools like matrices, SWOT analyses, forced rankings, et cetera. To go beyond the superficial, it doesn’t matter so much what tool or method is chosen as it does that the approach is methodical.
The CEO should be demanding of herself and the directors. When someone has a strongly held view or instinct, the group should take the time to explore why and dig into what is at the root of the perspective. When someone comes to a meeting unprepared, the CEO should ask them to prepare in the future. If they become distracted by their phone or computer during a meeting, or step out frequently or for long periods of time, the CEO can insist that they make the scheduled board discussion the top priority for that timeslot. When action items are agreed on coming out of the meeting – for the CEO or the directors – document them and hold people accountable for their promises. (For more on difficult conduct, see Curbing Bad Director Behavior.)
Take the time to write good minutes and keep a good minute book. Writing good minutes is an art form – here’s an exhaustive set of key “dos” and “don’ts” for reference. The value of good minutes goes far beyond just reminding people of what occurred in the last meeting. They can provide very important legal protections for the company and its directors and officers, and they can avoid the loss of significant exit value in the event of an acquisition due diligence process. For more depth on good board minutes, here is another reference piece providing an overview. Advise your CEOs to make sure someone on the board learns how to write good minutes, to take the time to approve them each meeting, and to file them in the minute book.
Ultimately, even the best board meeting won’t tell the CEO precisely what to do. Only the tricky questions make it to the board room, and there is always space for reasonable people to differ on these questions. The CEO’s job as the leader of the company is to take the wisdom drawn out of the board at each meeting and synthesize it into a decisive course of action. Someone has to sift, weigh and synthesize the output of a good board meeting, and that person is the CEO.
With these tips, an investor or advisor can help a CEO begin mastering the art of running a good board meeting over time. Next we’ll tackle what to expect regarding board conduct.
To learn more about working with boards, download this free eBook today Director's Guidebook: How to be an Effective Board Director in Early Stage Companies or purchase our books at Amazon.com.