Note: This article is part of an ongoing series on Board Directors. To learn more about their roles and responsibilities, 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.
If you’ve been following our blog for a while, you’ve probably read some of our other articles about what every early stage company board director should know. Below we’ve outlined not only the attributes of a great board meeting vs. a poor one, but also some learning and best practices.
Attributes of a Great Board Meeting:
- Focused - Board Chair or lead director should facilitate the meeting and make sure it moves along
- Results Oriented – Extract real value out of each meeting
- Actionable – Make sure each director has a task assigned due before the next meeting
- Punctual – Start precisely on time and end precisely on time (continuance if necessary)
Attributes of a Poor Board Meeting:
- Tactical – Stay out of the weeds of company operations
- Tolerant of Distraction – do not tolerate multi-tasking, emailing and texting
- Sloppy – late, disorganized, poorly attended, rudderless
If you follow the suggestions discussed in Stitch in Time Saves 9: A Guide to Start-up Board Prep, you are well on your way to having a productive board meeting. When a board is well informed, meetings can focus on the difficult topics that every early stage company is faced with. The Board Chair or lead director should consider the following suggestions to ensure the meeting is productive and covers the key areas of board responsibility.
Use a standard format for each of your regular board meetings – Most early stage companies will want to use a variation on the following format for their board meeting structure:
1) Introduction: This part of the meeting often takes 30 minutes or less
- Handle house-keeping issues such as approving minutes, option grants, etc.
Review company’s strategy followed by a review of the management dashboard
2) Strategic Discussion: This is the core of the meeting and will take up the majority of the meeting time.
This is where the board “earns its keep” in terms of adding business value. Helping the company address key strategic issues in areas such as product, market, team, competition and funding are what an early stage board is supposed to do.
3) Department Review: This is more of a report and a minority of meeting time will be allocated to it.
- Invite management team to provide update on each department (or bring in one department per meeting for deeper dive)
- Key department discussions include: R&D, S&M and Finance
- Provide board interaction with management team and give management a sense of how the board thinks and how they are held accountable by the board.
4) Executive Session: This special session typically occurs after the end of the main meeting, paradoxically, refers to a session where the executives (including the CEO) are out of the room. It is a good practice to hold an Executive Session even if there is nothing special to discuss, because it can be very unsettling to a CEO to have one called when they are not the norm.
- Gives independent board members a chance to discuss the whole management team in confidence
- Board Chair or lead director will typically be instructed to circle back to CEO on executive session, and there should be consensus or even explicit instructions on what to say if the topic is sensitive – many misunderstandings are born from inaccurately summarized executive sessions.
Please note that not every board meeting needs to follow a standard format. There are times when a company needs real strategic guidance and the board meeting can defer the departmental review (though deferring it should be a rare exception, because if you get out of the regular habit, it is a sure sign to the CEO that the board is worried). Pick a format that works for the meeting at hand and then make sure the meeting is well run.
Do not shy from tough questions – It’s easy for a management team to talk about what’s going well and avoid the key challenges they face. And, many times, management doesn’t even realize what they don’t know! A board member can add tremendous value by making sure that key issues are raised so that management can address the issues before it’s too late. The Strategic Discussion section of a board meeting is a good time to ask the tough questions. The “so what?” questions. Remember to get these questions on the board agenda in advance of the meeting. A board meeting has time to cover a few strategic topics. It is difficult to properly discuss all the issues in one meeting. Examples of questions that may be appropriate to ask include:
- Product & Product Market Fit – Does the company have a product that is a “Need-to-have” or a “Nice-to-have”? What are the top 2 or 3 problems our customers have and how are we addressing those problems?
- Market – Does the company understand its addressable market? Is the company going after a large enough market so that the business can scale? What is the best go-to-market strategy (direct, channels, etc.)? How has the market changed in the last few months?
- Team – What roles do we need to fill so the business can succeed? Will the people we have today help us succeed both now and in the future? Do we have a first class person in every key slot? If not, do we understand what we need and can we work around their limitations?
- Competition – What’s happening within the competitive landscape? Why are we winning/losing sales to our competition? More than whose position is improving, whose position is changing fastest, and why?
- Finance – What is the company’s long term financing strategy? What are the company’s plans to help drive shareholder value?
- Set one or two strategic topics per meeting and discuss them towards the beginning of the meeting
- Facilitate the meeting by keeping it focused and getting everyone’s opinion on key strategic topics
- Ask board members for help and follow-up after meetings with assigned action items
- After the meeting, review the board meeting with the Chair or lead and provide feedback on the strengths and weaknesses of the meeting
- Watch out for sloppiness – it can be an early warning sign of CEO incompetence or board apathy and should not be tolerated
Want to learn more about the roles and responsibilities of Directors? 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.