I sit through a lot of board meetings and while they are a great time for a company to harness the expertise of the people sitting around the table, they need to be structured and managed in such a way to actually accomplish that (i.e., effective board meetings don’t just happen – they are the result of planning and careful management). I sometimes joke with my dad that it must be tuff to get a word in at his board meetings given the powerhouses around the table; he just laughs and tells me that they prepare for their board meetings carefully. In actuality, I think he get a huge benefit out of his board – as do many of the companies I’m involved with – by doing exactly that. Here are a couple of quick thoughts on what that kind of planning and preparation might look like. Send out the board package in advance (a week is great; minimum is a couple of days). This allows you to set up an expectation with your board that they will have all read your board package carefully (which they should do, but won’t always be possible if they get the board package at midnight the night before the meeting). The board package should be comprehensive and cover updates from each department. Include a CEO letter or overview at the beginning of the package. This gives you the chance to set the tone for the meeting – setting up topics that you plan to dig into deeper and asking people to think about certain areas of the business for further discussion at the meeting. Since the board package is also probably pretty thick and full of data this gives you the chance to set the lay of the land for the board (very helpful) and point out specific things that you’d like to highlight in the package. Do not review the entire board package at the meeting. If you are sending out your board package in advance of the meeting and the package is comprehensive by department you should not feel the need to review the entire package (since everyone will have read it). Pick the highlights you want to cover; point out specific items that you’d like to bring the board’s attention to (presumably you’ve done this in your CEO letter as well); ask if there are any questions about the material. But please – don’t spend hours at board meetings reading every page of the package; if you work up a separate presentation to guide the board meeting itself, don’t feel like you need to stop on every page. Many of our companies like to focus on one strategic area of the business at each meeting and prepare a separate presentation to guide that discussion. I think this is a great idea. Make the presentation no more than ½ hour and be sure to make it strategic rather than tactical in nature.
Ask for help. Tell your board what you’d like from them. Be specific about ways they can help. If you need help with contacts be specific about who (or what titles) you are looking to meet (i.e., “we need contacts at potential customers” is not helpful – “we’re looking for a senior contact at xyz company for the following reason; I’ll send out a summary of where we are and what we’re looking for” is). If you are asking the board to vote on something, put all of the votes together and provide the right level of detail to make decisions. Putting all of your board ‘business’ into one section of the meeting helps streamline board meetings, as does including the appropriate level of information (for instance, if you are asking for approval for stock option grants be sure to include the % of the company people are receiving, the proposed vesting schedule and highlight anyone who is out of the bands the board has already approved; you should also include the total number of options in the pool and the total number remaining after the issuance you are asking for). If you’ve done extensive research on a topic and have a recommendation, put a summary of the issue and the recommendation on the same slide (and put the recommendation on paper – I find that when companies don’t do this, the discussion tends to ramble and isn’t focused on all the work that has already gone into researching the problem). Include your management team. I don’t like when companies shuttle management into and out of meetings – it’s disruptive and frankly I think that management teams should participate in the operations update for all departments – not just theirs. To do this effectively, start your board meetings with your operations updates and cover all topics that are appropriate for management to be included in, then ask them to leave to cover other board business, option issuance, etc. Don’t introduce new info at the board meeting. It’s much harder to react to surprises on the fly. You should include data in the board package or preface a topic you’d like to cover in your CEO letter (and if you can’t do either of those for some reason, give each board member a heads up before about a topic that you’d like to cover or about a piece of news that wasn’t included in the board package. Every board meeting should have an executive session of the non-management board members. This is a time for the investor and outside board members to talk about their impressions of the business and react to the board meeting. Do this every time – even if there is nothing to talk about (so that when there is something to cover it won’t be awkward). To use this effectively, make sure your board has a specific plan for communicating back to you from this meeting (i.e., have a standing meeting with the board chairman; ask the board to appoint someone on a rotating basis to debrief, etc.) – you shouldn’t be left in the dark about this section of the meeting and they should be used to gather feedback from the board (who probably never talks as a group outside of this session of the board).
Brad had a nice post on the subject of board meetings here. There are others floating around the blogsphere as well (if you do a Technorati search, you’ll find a bunch of them).
Hope that’s helpful. Comments/thoughts are welcome.