Many entrepreneurs who raised capital complain about their Board meetings: they are too long, require too much preparation work and don’t achieve much. Here are six ways to make these board meetings more productive, useful, and worth the time invested in them.
1. Choose Board Members Wisely
Just like any team, Boards function better when their members bring relevant expertise, respect each other, and have chemistry.
It doesn’t mean you should put on the Board people who get along well. Debates and different points of view allow founders to make more informed decisions.
One question founders often ask is: how soon should they put a Board together.
Another consideration is to adjust the Board’s composition (and size) to the startup’s development stage.
As the company goes through more rounds, control tends to change. At some point, founders lose the majority vote and need to share strategic decisions with VC firm representatives and independent directors.
2. Prepare A Concise But Informative Board Pack
Board packs are documents that are designed to help Boards make informed decisions.
They cover all material aspects of the company, from product development to financial performance, key hires, strategy, and equity-impacting issues.
Good Board packs are quite short. They aim at laying out sufficient information and facts for Board members to be educated on critical issues, and make sure the company is on the right track.
While it may be tempting to put as much information as they can to be thorough, founders should filter what is of interest to make value-creating strategic decisions.
Finally, it helps to keep the Board pack structured the same way so that Board members can sift through it quicker.
3. Hold Monthly Reporting Calls
One of the main obstacles to meaningful Board meetings is long back-and-forth discussions on numbers.
Founders should preempt this issue by sending Board members a monthly reporting pack with the main financial and non-financial metrics.
This so-called “Fact Sheet” should contain at least the following information:
- Topline numbers: sales by business unit and gross margins (when it’s possible)
- Main variations on costs, such as key hires and larger-than-usual spend
- Updated cash flow statement in a cash-in/cash-out format (or at least end of month cash balance)
- Commercial pipeline including the probability of success and sales potential
The monthly fact sheet goes a long way in focusing quarterly meetings on strategy because Board members will spend less time asking about numbers. They will have had a chance to discuss them at monthly reporting calls discussing the fact sheet.
4. Send Out Your Pack 48 Hours In Advance
Board packs take at least one week to prepare and involve many members of the leadership teams.
Given all there is to do, founders tend to leave it to the last minute to write the deck.
Consequently, they send it over to Board members too late, often only hours before the meeting – and sometimes not at all, which forces everyone to have a “live” conversation.
Unprepared Board members have less impact: they haven’t had time to think the issues through and bring value to the discussion.
They also are less likely to mobilize their networks ahead of teh Board meeting and challenge decisions that need to be taken at the Board.
5. Make Clear What You Want From The Board
One reason founders don’t get anything out of their Board meetings is, simply, that they don’t ask.
Many Board packs only describe the situation and propose a single course of action. They don’t leave enough room for debates.
Consequently, Board members go through the pack and fail to challenge the management team.
In a recent post, Brad Feld relates how the team presenting at one of his Board meetings had included specific slides before each section of the pack to tell Board members what was expected from them.
Good Board packs bring relevant information but no definitive answers. They open the floor for a discussion, not unlike Harvard Business School case studies.
A balanced cast on the Board will look at the issue under all angles and allow founders to make a decision knowing the ins and outs.
6. Take Minutes And Report On Progress
It’s paramount to take faithful minutes of the meeting, recording what was decided and what needs to be acted upon till the next Board.
These notes must be shared with Board members shortly after the meeting, so they have an opportunity to make their comments while the discussion is still fresh in their memories.
One good practice is to pull up a page, at the next Board meeting, showing what was decided at the previous meeting and how much progress was made.
Finally, let’s not be naive. Things don’t always go well between founders and their VC investors. Having confirmed minutes of past Board meetings will help clear up grey-area situations – or convince a judge, if it comes to that.
Board meetings don’t have to be waste founders’ precious time.
They can be moments founders use to reflect on the company’s direction, aided by a group of people who bring much-needed expertise.
All it takes is a good cast of Board members and a few rules to make the gathering as useful as possible.