Most board meetings are “update meetings” where management downloads its status to a group of investors. These outside board members spend most of the board meeting trying to reacquaint themselves with the company’s business and critical issues.
This is hardly ideal and some simple changes could help management avoid both issues. Put simply, the majority of board meetings becomes an exercise in management trying to reassure investors that “we’re doing a good job” and for investors to sounds smart so they can prove that “we’re adding value.”
Both of the functions are a waste of time. So most board meetings become bored meetings.
I’ve attended more than 150 board meetings in the last few years alone. Every time I think to write a post about this I figure the most recent board meeting I’ve attended will think it’s about them so I don’t bother. So I’m going to write a series of board meetings posts unrelated to anybody or maybe an amalgamation of them all. These posts are not about any individual company even though they’ve all heard me say these things often.
Today’s post is about doing the proper planning so you get the most out of the 2-3 hours that you’ve set.
If you don’t plan your board meeting I promise you that you won’t maximize the limited time you have with your board.
What should your goal for a board meeting be?
If I’m in your shoes I’d think about what is most critical to help your business succeed. If you’re a venture-backed tech company or even an early-stage business fueled by angel or seed money I assume you have a good group of board members or advisors who will give you time to be helpful and they want to be helpful. I’d want to maximize the amount of time these outsiders could spar with management on the key issues in my business.
So my board management (pre meeting, meeting, post meeting) goals would be to:
1. Provide enough information that non management board members could have a real debate about my strategic issues
2. Have the maximum amount of time in person dedicated to discussing the most important topics
3. Get board members to help me with things they are uniquely positions to help with – mostly introductions, recruiting or coaching my team members
4. And of course you must also get your board administration done. This should take the least amount of time possible.
Ideal Board Meeting
With the limited time you have together as a group, I’d want the following ratio of time spent
1. Provide information / context (15%)
2. Discuss, debate and potentially reach decisions on the most important topics (70%)
3. Deal with company admin: 409a valuations, approve stock options, vote on key measures (15%)
Ineffecient Board Meeting
In my nearly 15 years of attending board meetings I can tell you that the distribution of time actually spent on these activities while you’re in person is more like:
1. Provide information (40-50%)
2. Discuss topics but not the most important ones (20-25%)
3. Discuss most important topics (10-20%)
4. Discuss what intro’s investors could provide you, even if “off topic” or “not hugely relevant” (5-10%)
5. Explain and discuss company admin (10-20%)
The most important message from today’s post I’d like to impart is that board meetings that serve as update meetings are simply a waste of valuable time. You feel good about yourselves because you escape the board meeting with no controversy and you feel good about your presentation and all of the positive reinforcement.
If you have experienced people around the table wouldn’t you rather hear their points-of-view on the issues that have you waking up in the middle of the night?
- should we charge for our product or be freemium?
- should we ramp up sales hires now or wait for more traction?
- should we charge SaaS revenue, ad revenue or volumetric billing revenue?
- should we cut staff early since our revenue isn’t growing?
- should we hire the head of a business unit who has turned out to be a bad seed?
- should we raise capital now while valuations are strong or wait until next year when we have more traction?
- do we have the right product strategy?
You don’t even have to follow the advice they give. You could simply hear everybody’s opinions, debate them on the answers, ask for evidence of where this has worked / not worked. And importantly ask for introductions to portfolio companies who have been through similar issues.
The single most important changes you could make immediately to get more out of board meetings would be:
- Get the “company update” information out early in a presentation format sent 72 hours before the meeting (48 hours at the least). Let board members know that you’re not walking through this in the actual meeting
- Schedule 1:1 calls 1 week before the meeting to walk each board member through the key issues / performance metrics in the business. This is also helpful because you can find out if they have anything on their mind that they’d want to discuss at the board meeting. There should be no surprises at board meetings and having these short calls in advance will help control that
- Set the agenda of your board meeting as dealing with the most important topic items. Make it clear that this is what you’ll discuss during the meeting. Even better if they have reading materials to prepare for this discussion
- Write down the things that were actually agreed in the meeting and the introductions promised (the ones you want to pursue, anyways) and follow up after the board. I find that most boards are so relieved to be done with the meeting and “get back to work” that they don’t chase up on actions promised and they don’t send a timely reminder of the key agreements reached to lock down and memorialize those agreements.
I have much more to say on the topic. Rather than fit this all into one post I’m going to write a series over the next 2 weeks on how to maximize each of these functions and get the most use out of your board including:
- Who should be on your board at which stage of your company?
- How to control the discuss of a board meeting so it doesn’t get off topic?
- Getting the most out of board dial-ins
- Setting the agenda of the actual board meeting
- How much time should go into board prep & who should do it?
- What information should be provide & when
- Making sure your board is actually paying attention. It shouldn’t need to be said – it does.
I will try to keep each one 1,000 words or less.
In the meantime I’ve written about boards before so if you’re interested here’s some posts I’ve done over the years.
* Board Observers & Advisory Boards –
1. The Problem with Board Observers
2. Rethinking the Role of Board Observers
3. Why Advisory Boards Give Less Value Than Most Hope
* Meeting Dynamics
1. Presenting at Meetings without Going Down a Rathole (this was written for VC pitches but many lessons apply)
2. Meeting Dynamics (also for VC pitches but also some practical tips for board meetings)