Running board meetings as an entrepreneur is not always easy. Running good board meetings is even harder. And it is up to us as board members to help you, as an entrepreneur, get the best out of your board setup.
However, by applying some generic learnings and processes, knowing where your expectations are justified and where you could demand more, you will get more from your board, and the experience will be better right from the beginning for everyone.
1. What purpose does your board serve
A board is a sounding organ to your operations and your strategic planning. On a technical level, it's a governance body that guides and advises the managing directors - the leadership of a company - on strategic questions, governance decisions and on a variety of formal tasks, which are distinct for each legislation and laid out in the SHA, the Articles and the Rules of Procedure (MOA).
Furthermore, it has become custom that certain board majorities have a formal quorum on specific operational decisions. This majority is usually leaning towards your most recent lead investor.
2. What a board is not
Your board is not running your company. The board directors are not involved in running your operations, making day to day decisions, or easing the burden of making tough verdicts for you. Board members don't do the job for you, and should not eat time from you where the output you get from them doesn't justify the effort.
As usual, the line is blurry. I have seen great board members directly involved in business development through the member's previous industry network. That's pretty operational. But it's the exception!
3. What differentiates a great board from a meh board
A good board finds a balance between controlling governance guidelines — laid out in your articles of association / shareholder agreement / rules of procedure — and on helping to make the right strategic decisions.
Especially in the beginning of the company, it is custom that the investors do not take control of the board alone.
A good board does not slow you down, but a good board is able to help you reiterate your thought process, when it feels you are rushing into strategic decisions without having heard all relevant arguments. The method of formulating your arguments on why you want to make a decision, often helps to see things from a different side.
A good board never runs your company, but is able to help you make decision both strategically and on high impact operational questions. A good board is able to help you sell your company to high profile candidates, when they have competing offers. Ultimately, a good board is a tool that you can use to your advantage.
But as any good tool, you need to make use of it.
4. What you can expect from a great board
Understanding how a great board works will enable you to set your own expectations. You can of course expect preparation for meetings, discretion on all things discussed, follow up on deliverables, a group of people that fights with you for the long term success of your company. That's the basic.
A good board should be your sounding board for options. It often helps to lay out different paths, explain the pros and cons in order to feel right about your decision without much external input. A great board allows you to get to your own conclusions by simply asking the right questions, sharing learnings or patterns, and ultimately connecting you to the people in the ecosystem that can help you best with your current situation.
At it's best, a great group creates a dynamic discussion culture, which allows to jump from ground level to 30.000 foot view on the relevant strategic decisions. Where does this lead to? What options do we open and which doors do we close - and what resources do we need to make this happen - given that every decision has opportunity costs.
Most importantly, a great board encourages you as the entrepreneur to dare more, think big and move on in times that are rarely easy or calm. A good board is able to manage control and encouragement at the same time. This split of the role of the board member is difficult, yet good boards manage to fulfill both roles.
Ultimately, good board members represent not only the shareholders they are nominated by, but also the ones who do not have a seat. The greater good of the company is the focus, rather than the short term shareholder gains. You will instantly note if a board member tries to hide one behind the other.
5. What an ideal board preparation process looks like
To truly prepare, it helps to follow a structured process. Your design might differ - and what works at one company does not work at another. Board members are humans, usually with tight schedules. That doesn't mean that you can not expect preparation, follow-ups and accountability for their deliverables. Managing your board however, ensures you get the best out of it.
The following process has proven to work well. Deviate from it, adapt it, but the key elements will make your board work better as the members are prepared, ask smarter questions, understand the current situation, and therefore can be a better sounding board to you.
T-17 to T-7: You send out a suggestion for an agenda to all board members - and collect feedback for any open topics that the board might want to address in addition to your agenda.
T-5: You send out all board material - last minute changes are ok if you make sure to send the final deck out as well
T-3: You collect open questions via mail, or have brief 15 minute 1:1 calls with your board members to answer content questions that might lead to hick-ups / delays during the meeting, cause individual board members mis-read slides or in any other way will eat too much time during the actual meeting
T-0: Board meeting
T+1: You distribute the final version of the board material - if there were last minute changes
T+1: You send out the protocols (if you don't have a secretary or chairman) - and remind everyone of agreed deliverables / todos
T+7: You follow up on any open questions that were left open during the meeting
Stretched out and broken down, this sounds like an awful lot of work. But it really just means you lay out the work to get he most out of your board over some time. Yes, it means you need to be organized - and it is of course easier if you feel the work pays off as the discussion quality improves. But not doing it, is no solution either.
Physical board meetings run two to five hours, four to eight times a year. You can have one hour board update calls once per month in between. Less / no material for those.
Make sure you block the board slots at least three, better six months in advance to avoid travel conflict.
6. How to get the most out of your board
A good board is a tool for the entrepreneur. The best entrepreneurs I meet bounce ideas in between meetings, schedule board members to interview candidates
(yes, that means they get back detailed notes from the interview), to sell a position to a candidate - or to challenge a potential hire.
Use the following things to get the most out of your board:
- Structure your agenda well: 1) What decisions do you want to make 2) and key discussion points and 3) how can we as the board help you.
- Don't waste time during the meeting: You can expect everyone is aware of the KPIs in the beginning of the deck, focus on your questions, issues, decision points
- Prepare conclusions on your KPIs: We can read numbers, but it is your experience that makes the difference on what the company will change / do better / continue to do based on these. The discussions will be much more fruitful
- Don't just report the good news: The board is not here to praise you. It is often the discussion around things that do not work, that help the most
- Use board members as a sounding tool: Pitch one option of a decision to one, and another one to a second member in order to get unbiased direct input
- Call your board immediately when something major breaks: Building trust is paramount to any successful relationship. Hence please share major breakages right away. The board will find out anyway
- Actively use the network of your board: Who can help? Who has a contact? Who knows an industry expert - only by actively pinging, asking about concrete thing you need help with, will the board members be able to make a difference
The ambiguity between needing to know enough to help, and not knowing too much to be able to have a 30.000 foot view is the challenge we try to master