One of the primary responsibilities of a CEO is running the company’s board meetings. When managed poorly or without an aligned goal in sight, these meetings can be stressful for founders and tedious for board members.
However, irrespective of the stage (or funding round) that your company is at, there’s no compulsion for startup board meetings to be either stressful or tedious for any stakeholder at all.
There is a popular belief that the quintessential startup board meeting is all about reporting metrics and receiving judgement.
What’s the real story?
A good, effective meeting with the board comprises so much more than metrics. In reality, some of the greatest meetings are structured in such a way that most of the reporting and corresponding feedback is completed outside the meetings. In fact, startup board meetings are far more productive when the focus is not centered around scrutinizing the company’s past, but around charting its future.
When organised in such a way, such meetings can be an invaluable mechanism for making well-grounded decisions for the company’s growth.
That being said, metrics are important. In fact, a blog post titled 5 best practices of Board Reporting reveals that reporting of metrics (in the form of books, decks and reports) continues to serve as the core of board reporting. That’s an essential expectation that your board has from you.
It’s entirely true that there are moments in the journey of every business that are so complex (read: incomprehensible) that you’ll have no option but to push for tough decisions that won’t go down well with all the stakeholders. In these moments, there is nothing that you’ll want more than to garner the support of the maximum number of board members behind that tough call you're looking to make.
But here’s the deal:
People are more bought in when they are problem-solving with you: because that makes them an integral part of the solution. Don't expect them to be bought into tough decisions if they have only ever received updates.
Successful founders understand that a competent board is actually a highly useful resource. But a board can only ever be as effective as board meetings. Therefore, it becomes critical to capitalise on this fact by optimising board meetings for productivity - and great founders do precisely that.
How most startup board meeting prep works
What’s listed below is not a narrative of every single board or every board meeting - but is a fair characterisation of a majority of startup board meetings.
- A board meeting gets scheduled.
- Not very many people take it seriously until a week or two before the meeting.
- The management hustles at the last minute to pull everything together.
- Management is focused on its daily tasks: signing biz development, winning customers, shipping products; so this prep is a last minute "fire drill" and is seen as a distraction.
- Of the people who turn up, very few are mentally ready to lean into a high-value, productive conversation or have a strong sense of "what we should be doing.”
- Pre-reads are usually delayed and sent late, leaving little time for board members to review and understand performance this last quarter.
- In the meeting itself, the law firm does the job of preparing the board meeting minutes, stock option requests, and 409A valuations. These arrive at the same time, so given the choice of reading the financials and the deck or this stuff, there's a bit of a scramble.
- Nobody knows how many outstanding shares there are in the company, so nobody knows what percentage someone's 20,000 shares is equal to. Admin time is wasted on figuring it out.
- The CEO budgeted 20 minutes for each section, but we're already behind because the first three take 35 minutes each. There won't likely be any structured, cohesive debate about the most important items in the company unless a board member with experience escalates it or unless you put it in front of people.
- The meeting starts running over. The board members race out because everybody has to be at their next meeting. Even if a lot was discussed, not a lot was agreed upon by the board. If the company’s doing well, everybody leaves in a good mood. In case of setbacks, however, they start to doubt - but nobody says anything too substantive because, well, no time was allotted for how to actually make things better.
This should be your guide for what to avoid. We could call this the "inertia board meeting," because you are unlikely to be satisfied with the value that you get on the day of the meeting if you don't put the right kind of effort into the meeting beforehand.
How to maximise the effectiveness of startup board meetings?
#1: Create a set of KPIs for how you manage the business
Many management teams aren't disciplined enough about how they measure success, other than standard financial reporting. Start with a strong set of key performance indicators (KPIs) for how you run your business that is used by your executive team - irrespective of board communications.
Great KPIs adhere to the “SMART” criteria: which means that they are Specific, Measurable, Attainable, Relevant and Time-bound. This guide goes further into how to develop KPIs and all the good things that the right KPIs can do for you.
Of course, once you have decided on how to measure business performance, be sure to run the KPIs by the board members. This is an excellent channel for the board to let you know if you’re missing something important, inevitably leading up to improved performance measurement. It even helps create a relationship with the board that’s based on trust and communication.
No competent board member would ever ask you to create any performance materials or metrics for analyzing the business that you're not already creating for your own management's use. This is because no good board wants you distracted, doing a whole bunch of financial analysis that is strictly meant to be utilised by the board.
It shouldn't require extra work to prep the quarterly board metrics pack, if you develop a strong set of KPIs for how you manage your business and then develop a regular pack that the board is used to seeing.
Curious about which product metrics to pass on to your board? This post might interest you.
#2: Determine what your most strategic issues are
Meet with the executive team that attends or prepares for board meetings.
And reach an agreement with them about the most significant areas the company is working on.
Did I mention doing this 6 weeks in advance? I did? Good.
The significant issues can include: product development choices, fundraising, sales, competition, business development, marketing effectiveness, and M&A, among others.
Your first step should be to write the key issues that the management is grappling with. This could take the form of 3-5 key bullet points.
After you have these identified, sync with the executive team (and anyone else who you think is relevant) to narrow the list down to those issues that are relevant to the board at that moment in time.
How can you actually do this?
Well, there are 3 criteria to determine whether or not an issue is relevant to your next board meeting. Any relevant item meets at least one of these criteria:
- This issue needs to be disclosed to the board so that they aren't surprised by it later.
- This is an issue that is bubbling up and you would like to get the board's input to ensure that you're thinking about it correctly - alternatively (if “correctly” is too strong a word), then you might need validation that you’re approaching issues optimally.
- This issue is something that requires board approval.
#3: Create a short strategy/discussion deck
Use your favorite presentation software to create a presentation (of about 5-10 slides) on the key issues that you’re grappling with.
This should serve as a 'primer' for the board and a highly effective way to frame the key issues that you want to go over. If you have some financial figures or key metrics that go with the pre-read, then that’s even better.
Sequoia Capital has an excellent post that discusses how to prepare a board deck.
Here’s something interesting that Sequoia has to say about decks:
The best part?
The positive impact (of such a presentation) on the board begins even before the visual experience of going through the first slide. In fact, the impact is made from the moment that the board members know that you have worked to put something together (no matter how simple). That sheer effort adds a certain gravity to the issues at hand. It indicates that you desire to have a sincere discussion about very specific matters, and serves to evoke a similar sincerity from the board members - and it’s that kind of genuine earnestness that’s at the crux of the most productive startup board meetings that ever take place.
At the end of the day, the board is made up of humans. And humans involuntarily mirror the behaviour they perceive. It’s not for nothing that yawning is contagious, after all.
So, don’t yawn. Put some effort into a strategy or a discussion deck - and the board will reflexively pay greater concentration during meetings, approaching the boardroom table with a palpable respect for its sanctity.
#4: Create a board agenda
Create a board agenda in advance with special focus on topics and time allocation. Be specific and forthright about how much time you plan to devote to each area.
Here’s the deal:
Most boards are pitifully ineffective when it comes to time management. They end up allocating more time to less important topics and get stuck on relative trivialities, eventually rushing through the topics that truly matter.
A startup board meeting agenda should be purposeful. Think deeply about what is important to you and how much time you want to allocate towards it. Think about the goals of the day. If you start with admin (small stock option allocations, 409A valuations, startup board meeting minutes) and take up about 30 minutes with this , don't expect a productive and valuable output.
Save your meeting agenda for the things that matter most to you - and to your company.
#5: Get your financial deck out 72 hours in advance.
90+ % of financial packs come out 1-2 days before the board meeting, and about 65% arrive just one day before.
Suffice it to say that this is limited time for board members to read the packs, compare them to the last board meeting, properly digest them, and write up valuable thoughts, observations and questions. It's no surprise that all too often, startup board meetings end up becoming financial update meetings.
If you establish a consistent pattern of at least three days in advance (72 hours), then the benefits are twofold:
- Nobody is left with any excuse for not perusing the financial deck.
- You gain strong grounds for not doing a deep dive into finance data during the meeting, freeing up time and scope to discuss matters that you know are of far greater consequence.
#6: Send your agenda to everyone or set up calls in advance.
Send the agenda individually to each board member in advance and request "pre calls" to find out whether they think that the meeting agenda comprises the best topics or whether they'd like to add (or subtract) items to it.
Your strategy / discussion deck is also worth sending if you’ve succeeded in taking out the time to get it done early.
When it comes to the best-run boards, the CEO generally has 30-45 minute calls with each non-exec board member before the actual board meeting begins. In that time, the CEO leads a one-on-one walk-through of the information in the strategy and agenda. While doing this, the CEO and the director also go through the financials together.
Sounds like too much work?
Here’s why it pays off:
- You make sure that every board member who turns up on the day of the meeting truly understands your performance and is therefore suitably equipped to engage in a productive discussion.
- You get to find out what each member really thinks about the critical decisions you want and need to make. You’re able to figure out (in advance) where they stand if you want their support for a tough decision.
- Pre-calls also help you with one-on-one rapport building. When these calls are done well (and consistently) with all members before all meetings, then the consequent rapport and reputation that’s built leads to a domino effect that arms you with greater control of the boardroom when you are all together.
- Exhausting financial matters before the meeting allows you to spend less time on information dissemination and frees up room to deliberate on valuable items picked from an agenda that eventually impacts all the stakeholders involved.
It’s these valuable deliberations that are invariably at the heart of every productive and successful startup board meeting.