As one of India’s most active venture capital investors, we get the opportunity to participate in a lot of board meetings. Some are good. Many are not so good.
In most cases when we invest, the company’s board consists of only the co-founders or the founder and a friend/colleague and they have yet to establish the strategic role of the board. With financial investors comes the requirement to formalize the role of the board, to add new board members, and to run at least quarterly board meetings. View this as an opportunity to start building a governance system and processes that provide critical strategic advantage to the company and which will make it easier for the company to raise future capital. Investors like good governance.
I’ve participated in a LOT of board meetings where the majority of the time is spent on routine matters or slogging through lots of complicated operational details leaving only the last 15-20 minutes available for the big important topics. This is a huge missed opportunity for leveraging the experience and wisdom of your board.
Here are some tips on how to get more value out of your board:
Tip 1: Clear Agenda. Create a board meeting agenda which engages the board in strategic discussions on the big challenges and opportunities facing your business. This means that you have to intentionally structure the routine and operational details into a more concise format which can be easily understood and covered quickly. If there is a lead board member who likes to be involved in the agenda setting, reach out to this person with a draft agenda to get buy-in. We recommend picking at least one, and preferably two “big topics” to discuss at any board meeting. Big topics could take between 20 minutes and 60 minutes of agenda time each.
Tip 2: Consent Resolution. For items which need to be approved but shouldn’t require much (or any) discussion, create a “consent resolution” package. Include the materials you are requesting approval for as a “package” in your board prep handout. Make this the first item on your agenda and get it taken care of in 1-2 minutes.
Tip 3: Recap Action Items. It’s important to show your board that you listen to feedback and take action. Include a slide near the beginning of your board materials called “Key feedback and actions from last board meeting”. Show 3-5 important take-aways you had from the past meeting, who on your team owned following up, and what the resolution was (and date achieved). You do not need to review all of these items – they are here to show you acted on input, not to re-hash the discussion of the past meeting. Cover in 3-5 minutes.
Tip 4: Highlights/Lowlights. Create a “highlights” and “lowlights” summary of performance over the past quarter. Keep this to 1 or 2 slides max. The point here is to help the board quickly get up-to-speed on what’s working and what’s not. Your goal isn’t to fix all of the issues here, but to setup for a follow-on strategic discussion. This should take 15-30 minutes depending on the number of clarifying questions.
Tip 5: Company Dashboard. Agree on a dashboard-style report that you are going to provide at each board meeting. This should include key financials, metrics, and goals which the board has previously agreed are most relevant to track. Always include actual vs. plan with percentages to show magnitude of variances. Don’t go overboard with charts, as the brevity of a “dashboard” approach is important. It’s fine to invite improvements to the dashboard as your business evolves, but resist growing the dashboard to be overly complicated because that defeats the point. Focus on the areas of most variance and items that you consider the most important to the health of the business. Remember: every number you put on a slide invites a question or comment so only include what really matters! Target to cover this in 30-45 minutes.
Tip 6: Big Topics. In the board agenda and presentation, structure your discussion around key “big topics” carefully. You want to dedicate the majority of your allocated board meeting time to these topics. Lay out the questions you want to engage with them on. Provide relevant data (if not already in the dashboard). I find that discussions are often more productive if you prepare 2-3 options of how you might proceed with the pros/cons as this helps people get up-to-speed more quickly with context and can further enhance the brainstorming/debate process. You should also have a well-formed opinion on which of the options you would take. Organize the strategic and/or operational questions to be discussed in priority order in case you run out of time. You will find that if you make important topics central to the agenda that you will get a LOT more engagement from your board members and they will become co-problem solvers with you rather than critics. And since this is an intellectually more interesting challenge, you will also find that they are overall more happy about their involvement.
Tip 7: Prep Materials. Send out board meeting prep materials to board members via email at least 2 business days in advance and preferably more. In the email intro state that you are expecting everyone to read through all of the materials BEFORE the board meeting so that you can jump in and use everyone’s time most effectively. My experience is that most entrepreneurs don’t follow this advice and send materials either a few hours before the board meeting or worse. This guarantees that you will burn a bunch of board meeting time with people just getting up-to-speed vs. adding value. So, set a target (e.g. 2 business days in advance) and make it happen … just like you do for your best customers. Also if you have bad news to deliver, make sure that you deliver it early and clearly, and not as a surprise buried in the board meeting materials. In your monthly more informal update email to the board (yes, you want to be doing this) or, if it’s really big, as soon as you hear about it, let the board know about the big issue, preferably in a in-person meeting or phone call. Include some insights on what you doing in response and any other action items – e.g. you want to discuss at the next board meeting or setup a special board call.
Tip 8: Meeting Notes vs. Board Meeting Minutes. Ask someone other than CEO to take good notes and send them to the CEO after the meeting along with a condensed draft of minutes for the board meeting. The CEO should distribute the draft minutes via email to the board members soliciting any corrections or omissions. The final minutes should then be prepared for approval at the next board meeting. In general, the minutes should be relatively high-level listing the topics which were discussed but not going into the details of whom said what. Only decisions which require board (and/or shareholder) approval should be included. Note that the board should not be approving decisions that are the responsibility of the CEO as this undermines the CEO’s authority and reduces accountability.
Tip 9: Concise & Focused. Less is more. CEOs are understandably excited about their business and the details of their operations and accomplishments. They’d want to share all the wonderful progress they are making with their board. This all too often ends up being simply too much for an infrequently-engaged board member to understand, much less to provide input on. Resist putting non-essential info into your board packet; focus on conveying the important info with as few words and as few slides, diagrams and charts as possible. Ask yourself “If I saw this info about another company for the first time in 60 days, what would I do with it? Is it necessary for me to provide good guidance or to help me understand and advise on a big challenge?” Brevity will save you time in creating the board deck and will ensure you can stick to your agenda and have plenty of time for rich discussions around the big topics for which you really need the wisdom of your board.
Tip 10: Staff Exposure. Bring one or two of your key team members to most board meetings to give them exposure to the board. Have them present some content or facilitate a discussion. This has two benefits: (i) lets your board see the talent that you are developing increasing their confidence in your leadership; and (ii) provides good experience for your staff to interact with a key stakeholder helping them to develop a broader perspective and build some relationships.
Tip 11: Executive Session. Schedule an executive session segment in every board meeting that consists of all non-staff board members. This allows the board to have an opportunity for open and candid conversations about the company’s and the CEO’s performance. While this might seem a bit scary for the CEO, it actually can allow the CEO to get more timely feedback to which s/he can take corrective action.
This article was originally published on Unitus Seed Fund website.
Dave Richards, Co-Founder & Managing Partner
Dave Richards is an experienced entrepreneur, executive and global early-stage investor. He has been an early investor in microfinance and other emerging market sector businesses serving BoP (low-income) populations. Dave has been part of the Unitus Group since 2005, helping to lead efforts to select and invest in BoP entrepreneurs in many developing countries.