Beyond the Pitch
14 Rules for Leading a Successful Board Meeting
In most startups, the CEO also serves as chair of the board of directors. That responsibility includes managing board meetings. For young entrepreneurs, that’s often a new experience.
Having participated on many startup boards, I’ve seen it done well, and I’ve seen it done poorly.
Here are some suggestions for how to get the most out of your board meetings.
- Establish a board meeting template and an agreed-upon dashboard of key metrics. Sticking to a consistent format makes it easy for directors to track progress and keeps the meetings running on time.
- Prepare an agenda and distribute it to board members at least three days before the meeting. Highlight the financials (including cash position), key metrics, sales updates, key hires, and development progress. Schedule critical items (option grants and other legally necessary approval items) early in the meeting to avoid running out of time. Allocate time on the agenda for a strategic discussion of at least one timely and important matter for board discussion and advice. Leave adequate time for questions.
- Be respectful of board members’ time. Start the meeting on time and finish it on time. If you can’t cover everything on the agenda, you can always schedule a follow-up phone meeting. If your meetings always run over, there’s something wrong with how you’re preparing the agenda or how you’re conducting the meetings.
- Assign a person to be responsible for taking official minutes of every board meeting. The secretary should usually be a staff member or company counsel on the occasions where they attend the meeting. Your legal counsel can provide a format for board minutes (and language for any necessary resolutions) that the secretary can use. Promptly circulate the minutes for review and comments within 72 hours after the meeting, while memories are fresh. The minutes should succinctly describe legally required approvals, but should definitely not go into detail on operational matters.
Keep it Productive
- Avoid the temptation to have the entire meeting consist of “show and tell.” If you provide good financials and a useful dashboard of key metrics, the directors should not need hours of background and dozens of PowerPoint slides. Nothing is more frustrating to a director than spending an entire board meeting hearing how great things are going, instead of using the time together to ask important questions or drill down on important issues.
- Don’t allow anyone to hijack the meeting. As the board chair, you have an obligation to keep the meeting on track and aligned with the agenda (unless there is a consensus among the directors to move off the agenda). Some directors do seem to enjoy hijacking meetings, but you owe it to the rest of the board and to the company to prevent this from happening.
- Know and understand your business and financials inside out; if possible, have your CFO attend board meetings to be available for questions as well. Your job as CEO is to understand your business. Validation of the business model and mid-course corrections depend on you and the board understanding what is happening with your company. Expect a strong board to ask a lot of questions. Be prepared.
- Don’t be hesitant to involve company counsel, when appropriate. Company legal counsel does not need to attend every board meeting, but there will be times when it’s critical that they do so. These situations could include discussion of vital new financings (debt or equity), significant legal agreements, and any situation involving a potential conflict of interest with a board member.
- Have an executive session when necessary. An executive session allows the board to cover sensitive topics with only the CEO in attendance (for example option grants or exit strategies). If you have executive sessions regularly, these meetings will be considered standard, not a cause for concern among the excluded staff.
Communication Goes Both Ways
- Listen, with both ears. If you did a good job of recruiting your board members, they have knowledge and experience that will be beneficial to the company. Stay engaged. Ask questions until you thoroughly understand what they are trying to tell you.
- Be honest and transparent at meetings, in writing, emails, and in all communication. Do not over-hype good news. Never delay, avoid, or hide bad news. No one likes surprises. Come prepared with the facts and with ideas for overcoming whatever the obstacles are. Ask the board for their views. It’s your responsibility, but an engaged board is usually willing to help.
- If you don’t know the answer to a particular question in a board meeting, say you will get back to them with an answer. Don’t try to fake it. Then come back within 24 hours with a response. If you still don’t know the answer, tell the board what you plan to do to find out. Then do it.
- Do not be defensive, ever. Some board members do seem to revel in trying to embarrass the CEO; take the high ground. It’s your job to keep the relationship with your board members positive and productive.
- Communicate frequently between board meetings. Make sure the board members are receiving financials and the corporate dashboard at least monthly, especially if your board doesn’t meet monthly. If the company’s cash position is worse than plan, let the board know about this promptly. When you have important news—whether good or bad—at least send an email to the board members, so they know what’s going on with the company. And if you close an important sale or finish an important project, send the board a message letting them know so that they can join in the celebration. Your board is part of the team.
Board meetings take time and effort, at a time when the startup CEO is running in a thousand different directions. More than a few CEOs may wish they had no board, so they could “run the business” without interference from anyone. I’ve even seen many cases where board meetings are scripted to avoid any real discussion, like some kind of kabuki theater.
With outside investment comes a board, whether the entrepreneur likes it or not. The business of a corporation is legally subject to the direction of the board of directors.
If the entrepreneur has done the right job of recruiting board members and follows an effective process for building mutually beneficial relationships with them afterward, the board can become a source of enormous value to your business.
What’s your best tip for working efficiently with a board of directors? We’d like to know.
Learn more about working with boards of directors.
- From the Angel Capital Association: Ask an Angel: Berkus on Building a Board of Directors and Building Great Boards
- From EY: Adding Value, A guide for boards and HR committees in addressing human capital risks and opportunities.
- From Forbes: How to Run Your First Board of Directors Meeting
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