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Board Meetings

Most starting CEO's would say one of the least favorite aspects of their role is attending to the requirement for Board meetings. The content seems often contrived to meet presentation objectives that don't always relate to the needs of the CEO (and the initial leadership team). The meetings and their preparation take time from running the business, time more valuable if spent elsewhere (or so it seems). This implies a lack of understanding of how the Board fits into the equation of success and how to turn Board meetings into valuable events for the business. This is especially true when there is a well-defined obstacle the Company needs to overcome.

It's not uncommon for Board members, specially ones investing institutional money in the business, to focus on the details of the meeting just one or two days prior to it (or even the morning of). This contributes to the fact it would be uncommon for Board members to be as deeply involved in the relevant issues of the business as the CEO itself. This can make it difficult to go deep with critical issues often frustrating both sides -- and two sides it often is, sometimes polygonal in nature with each Board member having their own interests to look out for.

Given the Board meeting is the only forum where the CEO is effectively interacting with higher management, the nature and formality of Board meetings is critical to maximize the value for the time spent. The obvious rules apply -- have an agenda, run the meeting formally, etc, but how often do they occur? What should the agenda hold? Who should take responsibility for the agenda? What apriori information should be circulated to get the most out of Board encounters? What do the first Board meetings need to accomplish when first starting a company? Lots of questions that can be explored, so let's head in that direction.

The First Few Board Meetings

For a young business, the first Board meetings typically focus on establishing the rhythm for future meetings. It is important to develop a rapport with each Board member, review the logistics of how meetings will be organized and what the overall goals are for the first year of operation. There are also a variety of logistical things to get through, so the first meetings become important towards meeting a variety of governance requirements. The following highlights many of the key objectives you need to be prepared to address in the first few Board meetings:

The sooner all of the above is out of the way, the more you spend time with the Board on strategic issues. After about the 3rd Board meeting you should be seeing some rhythm develop which helps generate the value-add feeling Board meetings should provide.

Minutes

As mentioned above, someone needs to have the role to memorialize (e.g. write down) what transpires in a Board meeting. It can be any Board member or 3rd party although using a team member such as an administrative assistant is uncommon given what is often discussed. Sometimes your financial officer is a good candidate or someone from your lawyers office. You can take on the task of writing up the minutes but it's just one more thing you need to do taking away time from running the business.

Board meeting minutes are not often detailed documents capturing all conversation. They tend more to be a way to record any decisions that are made, such as approving the business plan, granting stock options, changes to governing policies, approving prior Board minutes, etc. It's not uncommon to cover all formal Board activities at the start of a meeting and adjourn the meeting after the first hour after which strategic discussions occur. Only the first hour would be covered by the minutes (assuming no formal Board votes are taken afterwards).

The minutes from each meeting are reviewed and approved by the Board at the following meeting. To make this work, it is important to circulate the draft minutes a few days prior to the Board meeting so everyone has time to review. Keep in mind the minutes represent an important part of the official documentation for your business, so you should also make sure all decisions are properly documented, especially and including details of stock options given how much more regulatory and tax scrutiny there is in this area.

Download Sample Board Meeting Minutes

Board Meeting Agenda

After the first few Board meetings you should be settling into a standard agenda. The first part of the agenda tends to focus on the formal aspects of the Board -- the things it needs to provide shareholder governance for. The second part tends to be the discussions between the management team and the Board members on important strategic issues. It would be common to have 25% of the time dedicated to the formal aspects of Board governance and 75% for strategic issues.

The formal items tend to be the usual things that need approval, such as a review of the previous Board meeting minutes or last month's financial statements (with financial officer in attendance). Approvals are often followed by the CEO's presentation of a business update which may or may not include a presentation by the Sales leader of recent revenue achievements and the forecast. This first part of the meeting normally ends with a bit of an open discussion on the state of the business so do what you can to have a slide or two with recommendations about next steps. Given the formality of the Board meeting is now passed, you can adjourn which means no need to continuing with minute taking (the Board secretary can now leave).

The second part of the meeting should be designed to take advantage of having the leadership team and Board members interact on strategic issues. You might have the Development or Product manager present the latest roadmap or the Marketing leader review key metrics illustrating how the Company is gaining (or loosing) its profile in the industry. You might have HR introduce a variety of new policies the Company is putting in place designed to improve overall performance. These types of items should occur at least once per quarter so the Board is up-to-date with an operational understanding of how things are going (and they become more familiar with the leadership team). The more the Board knows, the easier it is to have a proper strategic discussion -- it can also work against you as sometimes Board members forcefully press their view points based on their past experiences without really knowing enough about your business to relate. It's up to you to respond to relevant input, challenge the Board member if you feel the input is erroneous or work with the Board member to internalize the advice.

The agenda should drive the time frame for all discussions and all participants should understand the need to keep on track (not easily done). Like all meetings you may want to start the meeting with a review of the agenda so that any new or modified items become known before you get too far into things. Don't fall into the trap of putting your most important item at the end of the agenda thinking the most time is available, you might not get to it. This is where CEO's start to develop a feeling that Board meetings are distracting as they do not get to the items of most importance to the CEO. You're hired to be in charge, show it.

Like all Board meeting materials, circulating the agenda at least 3 days in advance is a good plan along with a summary of what the key items are that need to be accomplished. You may even want to talk with one or two Board members a few days in advance of a key meeting to make sure they are aligned with what you need.

Role of Chairperson

You may not have a specific chairperson when first starting your Company, but choosing someone from the Board to act as Chairperson is important. Given the goal is to maximize value of the Board, the Chairperson is responsible for making sure the agenda is followed each meeting. The Chairperson is also responsible for making sure the agenda has the necessary items in it -- it is not uncommon for the Chairperson to be responsible for the agenda as a result.

The meeting is called to order by the Chairperson. Each item is gone through and formally minuted. The Chairperson should limit discussion to keep on schedule and make sure one Board member does not monopolize the time of the rest.

The Chairperson should also consult with the CEO in preparation of the agenda and also act as a sounding board for critical materials. You should build a mentoring relationship with your Chairperson if appropriate, this will help build the relationship between the CEO and the Board.

The Chairperson is also available to act as an intermediary with the rest of the Board members. This can help with how you communicate and also to gauge any danger points for sensitive issues.

if your business is mature enough, or has the right potential for success, you can sometimes attract an experienced Chairperson to the Board. Ideally an in dependant Director with relevant business or operational experience to assist the Company.

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