Most inexperienced CEOs dread board meetings. That’s because they think they need to create all sorts of materials especially for the board, and need to spend most of their time in the meeting educating the board on the business. So by the time the meeting is done, nothing really gets accomplished. WRONG. The board meeting needs to be a productive and insightful meeting. It needs to be attended by persons that are already very familiar with the business, and can bring their expertise and insights to create a productive meeting. If your board meetings are painful and/or not productive, it’s generally your fault (the CEO) and less so the people around the table.
So what should the CEO do to have productive board meetings? Well, there are short term best practices and long term best practices. Let’s start with the short term.
Assuming you have the right set of people around the table at your board meetings, here’s a list of things that the early stage software CEO should be doing to make board meetings easy and effective:
1. Make the preparation painless: Don’t create any presentation materials just for the board. Start by making sure that your senior managers are conducting insightful retrospectives on their portions of the business. Have the senior team meet to review these functional retrospectives, where discussions can be focused on what went well, what went wrong, and what should be the goals going forward. Make sure that you’re using sound analytics to support the discussions. Then have the team summarize the retrospectives and the conclusions for your and their use. And then use that material to get the board up to speed on the business.
2. Prepare the board PRIOR to the meeting: Send the board all the readily available management/operational information that you have 3-5 days before the meeting. This should include your quarterly management retrospective, the goals for this quarter, the financials, and other critical information. Demand that board members read all the materials prior to the meeting, and call-out any members (I suggest you do this privately) who were not prepared. Have the members send you their questions, and get those questions answered prior to the meeting. This way, the meeting can be focused on the insights and the future direction of the company.
3. Focus the meeting on 2-3 strategic topics: Start by thinking through what you would like to get out of the meeting. What are your key strategic goals as the CEO and what do you want to get out of sharing them with the board? Focus the agenda on these topics and leave anything else to be discussed outside the meeting or as secondary items later in the meeting. Start the meeting by highlighting these topics and what you expect to get out of discussing them.
4. Do the rounds with each board member prior to the meeting: This is very important if you have a key strategic decision that needs to be made in the board meeting. Make sure the board can focus on making that decision at the meeting, rather than the meeting being a forum for coming up to speed and debating the issues. The idea is to know how each board member is going to vote BEFORE the meeting. This way you can manage the awareness and the debate before the meeting.
5. Be sensitive to travel times: Schedule the meetings at times in the day that would make travel for board members easy. And schedule a dinner before or after the meeting to give board members exposure to each other, your management team and you in a less formal setting.
6. Schedule the meetings early: At the end of the previous year, facilitate the scheduling of all board meetings and calls for the following year in advance. It’s painful, especially that VCs will be trying to coordinate meetings across all their portfolio companies. It is a lot more painful if you try to schedule the meetings on a quarterly basis.
7. Demand that all members be at the meeting: Outside of emergencies, no board member should be dialing in. If the meeting is not important enough for someone, he/she should get off the board.
Now let us move on to the more longer-term fix. To have productive and painless board meetings, you have to make sure that the right people are sitting around the table. Here are some thoughts on that:
Balanced and Qualified: You need a good balance between management members, investor members and independent members. Keep the number of seats an odd number (to eliminate the chance of a deadlocked board). For early stage companies, a board of three seats is too small, and seven is too big. So we tend to favor a 5 seat board.
Four ways of controlling who sits in your investor seat: 1. Only raise from qualified and knowledgeable firms, preferably only one or two. 2. Make sure you like the partner who’s leading the deal and insist that he’s the one that assumes the lead and takes a board seat. 3. Insist that the partner commits to attending all board meetings in person (no call-ins.) 4. If your investor has two seats and has a junior person sitting in the second seat, ask that the seat be used for an additional independent member instead (investor can select if they insist.) The junior investor can take an observer seat.
For management seats, make sure that every management seat is occupied by a qualified and value-adding member. Being a co-founder doesn’t qualify, unless the co-founder is experienced and is adding value to the meetings. That includes the founding CEO by the way. For more on this, read Mr. CEO would you hire yourself.
For independent seats, run a retained search and look for the best and most qualified candidate who can help you with your next stage of evolution — evolution either as a company or as a CEO. We like to find one independent who can act as the CEO mentor (typically an industry expert or an operational expert). Another independent can be recruited to give the CFO air-cover as the company matures.
Engaged: Each board member needs to be 100% engaged. Typically, board member attention span lasts about two years at which point they start getting bored. Make sure you’re recycling members when you see such symptoms. It’s hard to do this with investor members, but it doesn’t hurt to try. When recruiting independents, I suggest having them on a three year vest, which gives you leverage to keep them focused. If not, fire them. Ditto for management seats (see my comment above).
Engaged means two things: First, each member needs to come prepared to the meeting and needs to be vocal and value adding. No phone-ins.
Second, put board members to work! Each board member should be taking on a project on your behalf. Senior management recruiting is a good one. Strategic networking is another. CEO/CFO mentorship another.
Cohesive: Just as you would want to focus on building a cohesive senior management team, you need to make sure your board is cohesive. Apart from making sure you have the right members in place, and that they are engaged, you also have to manage a personality fit. You will need to spend time before and after a board meeting to make sure that every member is aligned with and respectful of other members. That doesn’t mean that everyone needs to be agreeing on everything. Good respectful conflict/debate is good. Intrusive, opinionated, disrespectful conflict/debate is bad. This tends to mostly happen with an arrogant investor senior partner (especially investors from different firms on the same board trying to out-talk each other) and also happens with an aggressive CEO.
Source: Firas Raouf, OpenView Partners