After 18 years of attending board meetings, you get a good sense of why some meetings work well and others don’t (even monkeys can recognize patterns!). Here are some observations and pieces of advice for entrepreneurs who may have just raised their first venture round, have outside directors, and are new at running their own board meetings (and maybe even some more seasoned entrepreneurs who may just want a fresh perspective):
1. Set expectations and open the lines of communication. As with any relationship, professional or personal, it’s much easier to meet or exceed expectations if both parties know what to expect. Before your first board meeting with new outside directors, have a conversation about their preferences. If they’ve sat on a board before, there might be things they feel have worked and things they feel always mean failure. On your end, consistency in delivery, form, timing, and substance will communicate to them that they can depend on you. Deliver board materials in advance of the meeting, with enough time to allow for meaningful review. Work with your lawyer to get board minutes to your board within a week or so following each meeting.
2. Limit the time. Keep your board meetings between 2 and 3 hours. If you need to go longer than that, hold more frequent meetings. People tend to lose focus and energy if meetings go longer than 3 hours. And when there are too many slides or too much material to cover, the meeting becomes a “death march” to get through the material — directors become hesitant to participate and instead become focused only on finishing the meeting. If you are strict and keep things moving, you can almost always cover what’s required in 3 hours. On a related note, always try to leave 15 – 30 minutes available for unstructured discussion at the end of the meeting; often, this is where the most important board business is done.
3. Limit attendance. Board meetings tend to be less productive when there are too many people in the room, either because there are too many voices or because the discussions become more guarded. To get more out of your board meetings, limit attendance to enhance the discussions. If you have a large management team, alternate which team members present at the board meetings. Or devote a meaningful amount of time to a closed session where only the directors and senior management are present.
4. Don’t over- or under-present as CEO. Your board wants to hear from you as the CEO. Spend the first part of your meeting talking about the business from your own perspective: what’s working and what isn’t. Try to give a strategic overview (a “CEO report”) and set the tone for the rest of the meeting. Make sure your voice is heard in the meeting and that the theme you establish at the outset weaves its way through the meeting. Then, let your team present. Try not to disrupt their presentations unless you have to. Let them stand or fall on their own, without feeling the need to “save” (or stifle) them. It’s good for the board to see your team in action. On the other hand, don’t hand the meeting over to your team entirely. Meetings will fail if you don’t contribute meaningfully to them.
5. Prioritize the presentation. Hit the key topics upfront. Directors don’t want to wait until the last 15 minutes to discuss the most critical material. It also will ensure the other, less critical items aren’t glossed over to get to the key topics. Having said that, keep an eye on the time so the key discussion topics don’t hijack the entire meeting. Set a time limit in advance for each key discussion topic to keep things moving. You can always go into more depth on them later.
6. Have the lawyers prep the administrative items in advance. Option grants, approving prior minutes, and other customary administrative issues shouldn’t take more than 5-10 minutes to cover. If companies aren’t prepared to discuss these items, however, they can take too long to get through and eat into time allotted for more pressing items. Have your lawyers prepare proposed resolutions that address administrative issues in advance, and have them present these items either at the beginning or end of the meeting. (We prefer covering the admin items quickly at the start of the meeting). If you want to cover the items on a set of slides, that’s fine, too, but make sure your lawyer is there to back you up on Q&A (particularly around equity issuances, where valuation, available option pool percentages, grant ranges for certain hires and related questions often arise).
7. Develop a set of standards to track your progress at and throughout each meeting. Figure out what the key performance indicators, or “KPIs,” are for your business and track them at each board meeting. Depending on your board, you may want to discuss these with them in advance of your first meeting in case there are specific metrics they want to see. Remind your directors what your goals were for each KPI and whether you hit them. If you didn’t achieve your targets, be open about it and offer your best explanations as to why. It’s always awkward and sets up a bad dynamic if your directors are calling you out for missing KPIs instead of you acknowledging the discrepancy upfront.
8. Over-deliver on any action items. Directors hate asking for the same things over and over from the management team in board meetings. Keep a note pad with you and write down (or have your lawyer or CFO write down) things board members want to see in future meetings. It could be stylistic — such as breaking down a particular business metric in a different way on a chart — or substantive — such as requesting that the VP Engineering present at the next board meeting. Summarize at the end of each meeting the requests made from the board, and plan to address them at the next scheduled meeting, if possible. Remind the board at the next meeting that you are addressing their request, so you get full credit for delivering on it.
9. Don’t look defensive, even if you disagree. We see this fact pattern frequently: you know the business far better than the board and usually are in the best position to diagnose a problem in the business and solve for it. Your board has spent far less time on the problem you are presenting and may not fully understand it. It may offer up a solution that makes no sense to you, or one you’ve thought about yourself but concluded is not appropriate. You quickly dismiss the suggestion and spend the better part of 10 minutes explaining to the board why they are wrong and you are right. It becomes a debate. Before you know it, you look defensive and dug in. You are now in opposition to your board, which may have only been trying to help you in the first place.
Instead of winding up in an adversarial position relative to your board (even though at times it’s inevitable), try to acknowledge their solution and give it air time. If it is partially constructive, acknowledge the parts that make sense. Express gratitude where warranted for the attempts your board makes to help you problem solve. And if you have a beef with a director over their viewpoint or behavior in the meeting, take it up with them offline. The meeting should be about the business, not about competing personalities and ego.
10. Follow up with a “neutral” on how the meeting went and the messages behind the messages. Your lawyer has likely spent thousands of hours in board meetings taking minutes, handling required board business, and assessing group dynamics. Others in the room may have as well. After each meeting, go to those individuals and get their take on how the meeting went. Many times that person might offer a perspective very different than your own (in both “good” and “bad” ways). Because you are running the meeting, paying attention to the time, focusing on the material, and taking notes on the feedback you’re getting, you’re going to miss things. Find out what those things are after every meeting by circling up with a “neutral” in attendance.
Caine Moss is a partner in Goodwin Procter‘s Technology Companies Group with significant experience working with software, telecommunications, Internet, and financial services companies through all stages of their growth. He also has broad transactional expertise, particularly in the areas of venture capital, public and private mergers and acquisitions, and representation of issuers and underwriters in public equity offerings. His current representative company clients include Ayla Networks, BitPay, Bucketfeet, Boom Financial, CircleUp, Collective Health, Hello?, highfive, Kiwi, KIXEYE, Machine Zone, Motif Investing, RocketLawyer, thredUP, Twenty20, Vaurum, Wearable Intelligence, and WePay.
Emma Mann-Meginniss is an associate in Goodwin Procter’s Business Law Department and a member of its Technology & Life Sciences Group. She advises founder, company, and investor clients on a variety of corporate and transactional matters, including formations, financings, investments, and mergers and acquisitions. Her current representative company clients include Ayla Networks, BitPay, Dasheroo, EVA Automation, Vaurum, Twenty20, and RayVio Corp.