This resource is meant for both for-profits and non-profits. While the mission of each may be different, the purpose of a board of directors is the same: to support decision-making that maximizes the impact and resilience of an organization. CEOs run organizations, not boards.
What decisions do board of directors make?
As stewards, the board is responsible for the leadership and financial integrity of an organization. They vote and decide who is designated as Chief Executive Officer (CEO) to lead and operate the organization. They also vote and decide on key financial matters like the operating budget, compensation for executives, material strategic agreements, and financings.
But what’s the difference between a good board and an excellent board? The use of the time spent together.
How do board meetings happen?
Board meetings often happen quarterly. But they can also happen at different cadences or ad hoc if needed. What’s key is that they match the rhythm of your business. The ingredients for a successful meeting are: the people, the context, and the medium.
People - The only required attendees for a Board meeting are the Board members. The CEO decides who the additional participants should be.
Context - When a meeting happens, there are matters to be discussed and decisions to be made. The context for the meeting should be communicated beforehand and the CEO should include additional participants who can provide the appropriate background. The Chief Financial Officer (CFO) and General Counsel (GC) are often included as are other executives and subject matter experts. The Corporate Secretary (usually the GC or outside counsel) creates minutes for the meeting capturing the decisions made.
Medium - The preferred medium used to be in-person pre-Covid, but a board meeting can happen over the phone, virtually through a Google Hangout or Zoom, or even over email.
Who is on the board?
Boards are usually made up of the CEO, investors, and strategic advisors. The size and makeup of the board is decided when the organization is created. Often it is expanded when an organization raises money.
What are board materials?
All the materials prepared for a board meeting should be useful to the leadership team assembling it. What is even better is if the materials are existing charts, slides, and spreadsheets that have already been created for the day-to-day management of the organization.
I have found a powerful addition to the board deck is 2-3 page narrative written by the CEO summarizing the state of the organization (highlights and lowlights) and the key decisions that need to be made at the meeting.
The accompanying deck includes:
Vision - Why does the company or organization exist? How is the company’s vision coming into view? Reiterating the north star sets important context for the more detailed operating sections below.
Operating Metrics - What are the key measures that share the health of your organization?
OKRs - What are the main initiatives underway this quarter? How were the grades for last quarter?
Financials - What is the plan for the year? How are we doing against that plan? When will we need to fundraise?
Team - Who are your current leaders? How is retention and attrition? Where are the gaps and key roles you are hiring for? What compensation approvals need to be reviewed?
Division Updates - What are the essential updates from each part of your organization that you need to include? Think: Product, Engineering, HR, Legal, Sales, Marketing, Customer Support, etc.
Committee Reports - As your company matures, you will start to form committees. What topics and approvals do you need to surface to your committees? What updates from the committees need to be shared with the larger group?
Special Topics - Are there any additional slides needed to help facilitate any additional discussions the board is having? What keeps you up at night?
Not all slides have to be presented. They can be provided in an Appendix. Or you can weave them into the larger deck and place a star in the top corner for the ones that you are planning on presenting, and include the others as additional context for board members.
For startups: When your organization is just starting out, a slide deck may feel overwhelming to create. Skip slides and try presenting the material you would have put into a deck as a longer memo. It will encourage you to write clearly and not wrestle with slide designs.
What should happen during the meeting?
The meeting is the CEO’s meeting to drive. They will be the master of ceremonies guiding the meeting from start to finish. It is their responsibility to get the board focused on the issues that matter.
There is no perfect length to a board meeting. Shorter tends to be better because of meeting exhaustion. It needs to be just the right length to spend time on the key topics and creating the right space for your board members to engage to the fullest.
A structured agenda helps keep the meeting on track. Dedicate time for strategic topics where you need your board to engage.
While it is natural for a board to provide pressure on the CEO and management, it is critical that they do not prescribe. The board should not be setting the plan for the organization, it is the responsibility of the management team and their commitment and ownership of it.
The small details…
These are some of the practices I’ve seen done over the years that work really well:
Know what you need from your board - Your board exists to help you and the company succeed. What asks do you have for them? How can you be clear about those?
Send materials in advance and encourage questions ahead of time - The earlier you get materials to your board members, the more time they have to digest them. If you send your materials out via Google Docs or Office 365, your board can add comments and ask questions before the meeting.
Highlight the reds, yellows, greens - Your team knows the material best. Use colored highlights to help your board focus in on the areas of the financials and metrics that are worth discussing.
Be transparent about your financial plan - Set a budget at the start of the year. Reforecast at the start of the quarter. Track progress towards the plan each week. Share the differences and outlook with the board.
Give your leadership team visibility to the board - Dedicate a portion of your meeting to have your senior leaders and subject matter experts present to the board. It is motivating for those employees and beneficial for the board.
Feedback for the CEO - Try to save 15-30m at the end of the meeting for your board to compile feedback for the CEO. Designate someone to share that feedback afterward.
Use the different session types effectively - There are a lot of ways to structure your agenda and which members are present. The “open” sessions tend to have a wider audience, where management is invited to participate. There are “executive” and “closed” sessions that restrict attendance. The definitions and accepted practice of each differ from organization to organization. To dispel any confusion, just list the attendees of each session as part of the agenda.
Tap into your board observers - They often have a world of energy and expertise that can be drawn on. Help them understand how you want them to participate in the meeting.
Work out all the kinks in your dial-ins, demos, and dates - Everyone should be able to show up and everything should just work.
Get ahead of the surprises - Send an email. Make a few calls. If a crisis is brewing, don’t wait till your next board meeting to raise it.
Talk to your board members between board meetings - As CEO, build a 1:1 relationship and communication channel with your board
What contributes to a bad board meeting?
Often, no one thing can sabotage a board meeting. It’s usually a set of small issues that compound and ruin the gathering. Below is a list of offenses that you can work to avoid:
What else would be useful?
This resource is a compilation of answers that I’ve given during office hours at WhatMatters.com and to the founders I have been fortunate to work with. If you have other questions just ask!