Running an efficient board meeting

Board meetings can be a gigantic waste of time if not run appropriately. On the flipside, they can be a valuable source of input and guidance for a management team in the pursuit of maximizing shareholder value. While there are a number of different ways to approach and run a board meeting, I thought I would outline a few of my philosophies on them, and what I expect from my portfolio companies in terms of content.

1. Be prepared: Board meetings are like theater. Like any play, I expect the CEO to have a well thought out and scripted agenda for the meeting. The most efficient way to do so is to lay out an agenda and get feedback pre-meeting from the other board members to ensure that the board covers appropriate topics and allocates the right amount of time for each one. From an update and preparedness perspective, the CEO should always go into the meeting having a complete understanding of where the various board members stand in terms of any major decisions. There should be no surprises. This means that the CEO should have individual meetings and calls in advance of the board meeting to walk each director through any decisions that need to be made and the accompanying analyses behind them.

As far as board packages are concerned, I typically like to receive them at least 48 hours in advance so I can process the information and be in a position to ask intelligent questions.

2. Timing: For an early stage company, I typically like to meet in person every 4-6 weeks. Lately I have been skewing to more of a 6 week time horizon. I believe that timeframe gives the team enough time to execute on some of the goals outlined in the meeting and not spend their time constantly doing powerpoints for the board.

3. Content: As much time as possible should be spent on discussion, rather than update. What I want to know about is the management team's priorities and why, how they are tracking against those goals, and what keeps them up at night with respect to meeting their objectives. What I do not want is a litany of presentations and tech demos with no discussion. At board meetings we should continually evaluate and monitor the company's strategic goals, understand where the market is and how we are positioned vis a vis our competitors, and discuss management's plans, priorities, and performance.

While there is no right way to run a meeting, having a framework can be a great way to lead organized and informed discussions. A good framework that I like to use is having the CEO give a high level company overview followed by a department level drill down delivered by the functional head. Typically, in the context of these department-level updates, discussion will ensue on milestone progress, roadblocks or hurdles to realizing the goals, resource constraints, performance of various employees, and any potential addition or subtraction to the list of goals.

Listed below is a standard framework that I like to use in board meetings along with some sample reports that help guide the discussion and allow directors to review performance. By no means is this meant to be an exhaustive list. Alot of these reports serve as good leading indicators for potential areas of problem down the road and none of these should require management to reinvent the wheel.

Company Summary by CEO
-Company overview discussing recent performance with highlights on each department
-Summary of key matters to be presented and decisions that need to be made - remember that decisions can only be made if the directors are all familiar with the issues and have had a chance to review the supporting analyses and risk factors pre-board meeting

During the meeting, it is the CEO's responsibility to cover the agenda and keep the directors on topic and focused. That means if the conversation runs off on a tangent the CEO has to bring everyone back in line and table the discussion for another meeting.

Sales Review
-Detailed sales pipeline review by region
-Key wins/losses - detail on the losses and to whom

Professional Services (usually incorporated in context of sales discussion for smaller companies)
-Status of existing customer implementations and satisfaction

Marketing
-Competitive positioning update
-Product roadmap
-New product launch plan, etc...
-Lead generation statistics

R&D:
-Summary development plan of key features to be delivered for quarter and current progress
-Bug report broken out by severity-should also track resolution and time outstanding against prior months/quarters

Customer support:
-Statistics on level 1, 2, 3 calls and performance as measured by time outstanding versus prior months/quarters

Finance:
-Plan vs. budget - income statement, balance sheet, cash flow statement

Depending on the stage of company, the time of year, or crisis of the quarter, there will be a much deeper dive into various departments to discuss topics such as product roadmaps, the budget, the sales plan, and partnership strategy. The more information the board has in advance by way of supporting analysis, the more informed the discussion will be.

At the end of the board meeting, I typically like to have a board-only session where the members can not only make the requisite board approvals for stock option grants and the minutes but also feel free to discuss any pertinent or sensitive topic like executive compensation, budget planning, financing/exit strategy, or concerns about personnel. This session allows the directors to evaluate any management proposals and comment on performance in a candid and open forum without embarassing or browbeating any executive. While a board meeting should only last 3-4 hours for the most part, you have to remember that much of the work of any board happens outside of the formal meeting and through the informal daily/weekly interactions with the mangement team via telephone, email, IM, and face2face meetings. This is where the heavy lifting happens. When you find yourself diving too deeply into a discussion on sales tactics, for example, the board may be better off saving that conversation for after the meeting. Before you present next year's plan to the board, you should run it by a few of your more active board members for comment and advice before rolling it out to the whole board. If you find yourself having 8 hour board meetings, then you are probably getting too focused on the details (breakout sessions or scheduling subsequent informal meetings to drill into a particular topic is more appropriate) and not doing enough preparation in advance of the meeting.

If you are more interested in the board's role and who should be on the board, I suggest reading some excellent posts from fellow VCs Brad Feld, Fred Wilson, and Jerry Colonna.

UPDATE: Fred Wilson adds to my post emphasizing the non-executive board discussion. As Fred says, it is always a great idea for the non-executive directors to be in synch wih their thoughts and overcommunicate prior to and after the board meeting. This also means having the right people in and out of the room. I totally agree.

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This post was written by who has written 358 posts on BeyondVC.

11 Responses to “Running an efficient board meeting”

  1. Troy Angrignon Sep 14, 2004 at 11:20 pm #

    Hi Ed, thanks for the excellent article. I have been enjoying learning from you, Brad, Fred, and Jerry. I call you my blog-mentors! I am wondering if you have any recommendations for any particularly great books on building and operating really awesome boards. If so, can you please either respond on email, respond on this comment board, or perhaps put it in a posting? Thanks in advance.

  2. ralph clark Sep 15, 2004 at 10:57 am #

    Ed, excellent post on how to run a board meeting. I would like to add the idea that investor board members should always try to schedule an informal lunch or coffee meeting with other key members in the organization after the board meeting. It is in those meetings they can get additional context on how the company is operating. It should not be positioned as going around the CEO’s back but as an effective way for board members to develop relationships with those key team members and also get more of an unfiltered view. Not only should the CEO be aware of those meetings but they should help facilitate them.

  3. Anita Campbell Sep 17, 2004 at 8:26 am #

    Required reading for any entrepreneur!

    One thing this post highlights so well is how much time the CEO needs to spend on communications with his/her Board. Managing Board relations is a critical aspect to the job that many young CEOs I know don’t seem to grasp. Then they wonder why their relationships are poor with certain Board members or why their Board becomes disenchanted with them. No wonder at all.

  4. Danielle LaFleur Sep 22, 2004 at 2:47 pm #

    This is a fabulous post. I only wish I had read it years ago when I was on my first board.

  5. Steve Shu Nov 1, 2004 at 9:08 pm #

    Ed,

    Very nice post. I have organized and helped to facilitate a number of board meetings as a secretary of the corporation, senior manager, and consultant. Although I have experienced much of what you have described above, this is the first time I have seen experiences like these written down … and I have referenced quite a bit of material such as books, journal articles, magazines, things on the NACD site, etc. Thanks for the post. Please keep online for others to reference!

    Steve Shu
    Managing Director
    S4 Management Group
    Email: sshu@s4management.com
    Web: http://www.s4management.com
    Business Blog: link to sshu-s4.tripod.com

  6. karen Nov 30, 2004 at 12:18 pm #

    Thanks for the article, would like to receive input such as this in the future. Everyone needs help to move things along on organizing their thoughts; you’ve helped me.

    Please do not share my email address.

  7. Deep Mar 3, 2005 at 8:55 pm #

    Hi Ed

    Your article has helped me to give clear and practical examples to my students how a board meeting should be conducted. Your explanations are much better than the ones in the book we are using at the moment. Bravo!

  8. Naomi Nhiwatiwa May 7, 2006 at 9:38 pm #

    Thank you for the great presentation, great suggestions.
    I have just set up a Board for non profit organization-Zerapath. Mot of my board members are new. How do I orient them?

  9. Susana Alesón Dec 11, 2006 at 3:27 pm #

    Very useful article. I found many practical ideas that we will definitely use in our forthcoming board meetings!

    Susana Alesón García
    Treasurer
    The European Law Students´ Association (ELSA)
    Spain

  10. Mark Jun 12, 2007 at 8:18 pm #

    Ed,

    Thanks for your very insightful comments on improving the effectiveness of board meetings.

    I would like to offer an additional resource on the subject. Les Stahlke has authored a book on the overarching topic of governance in his work “Governance Matters” and I would highly recommend it as a primer for effective board management practices. I am attaching a link for more details regarding surrounding this work.

    link to relationshipmodel.com

    Regards,

    Mark F.

  11. James Dunn Nov 24, 2008 at 4:29 am #

    Hi Ed, I’ll bump this entry because it came in handy for me. I served on my church board for two years and I was elected chair for the final year. Hesitant at first in a new role, I turned to the Internet for answers and your article met my needs perfectly.

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