Board discussions and board relationships are some of the most powerful ways a CEO can influence the success of the company.
What is your responsibility as CEO wrt the Board? It is to keep the board properly informed about what is really happening in the business and to ensure that the board decisions optimize the business’ chance for success (or, at a minimum, never do any harm).
Your board is composed of a group of people, who in total have a wealth of experience observing and assisting other companies at your stage. Some of those include companies that have grown a lot larger and others are of those that have struggled and stagnated. The sum of these experiences is an opportunity for pattern recognition that should be leveraged to the fullest.
How can a board be most useful to you as a CEO? It is by helping you strategize, make key decisions in the absence of perfect information, and ultimately by being supportive of the company as it goes through the inevitable ups and downs of its journey. A well-functioning board is also more effective than the sum of its parts if it is effectively guided in useful discussions of key strategic issues. To do this, the board needs to have a good background on your market, your business, and the competitive landscape. It is your job to make sure they always have this knowledge but also to focus the discussion on the larger issues that will affect future success.
Some don’ts and dos from my experience.
Don’t have the entire executive team join the entire board meeting. While that may be a useful thing to do at the earliest stage as the company is pivoting frequently and trying to determine what its market is, later on it will inhibit your ability to focus the discussion on the most important strategic issues and also can make it more likely that the discussion goes down an unproductive rat hole due to something unwittingly raised by one of your execs. Of course, it is a good practice to invite an individual exec to present a topic up when that exec can add a lot to the specific discussion (more on that below).
Don’t allow the entire meeting to be consumed by discussion of the standard board information summarizing recent results. As mentioned above, the value of the board comes in strategic issues and key decisions. They do need to understand the business, but if you are giving them that understanding in a continuous way over time, there is no need for it to consume the majority of a board meeting. This often occurs because you have failed to send out the board materials far enough in advance and to establish an expectation that board members have reviewed them before the meeting.
Now, some “dos”.
Use a standard format for the review of recent results. This should be true both for quantitative results and for your qualitative observations. As the business grows, the standard format can be altered, but having a standard supports the second ‘do’ in allowing you to manage board discussion time towards the most important topics.
Deliver board materials two to three business days prior to the meeting and expect board members to have reviewed the materials. Not only does this use discussion time more effectively, it allows you to manage the time in the board meeting towards the key items you want to discuss rather than having it be filled with a detailed review of past results. You can spend only as much time reviewing the past results as required to keep the proper board level understanding of what is happening in the business and to make the board aware of exceptional developments.
Choose two (OK, could be one or could be three, but never more) key discussion topics on which the majority of the board time should be spent. Since you as CEO will always have more information than board members about the topic, you should have a preferred outcome from the discussion. The slides to be presented should be kept to a minimum (I found that with some execs I actually had to insist on a limit of ten slides) so that the board discussion is kept to the right level of detail. When a key decision has to be made acceptable outcomes are the decision you thought was the correct one (ideally with board support or at a minimum at least board understanding of your reasoning), you getting persuaded by the board discussion that an alternative decision is a better one, or a way forward to quickly gather more data to inform which course of action is best. If another exec is coming into the meeting to present or participate in the discussion, it is vital that you spend time with her/him in advance so you understand her/his view and prep the exec on how you wish to manage the discussion.
Discuss extremely important or contentious issues 1-1 with key board members in advance.
Since it is your responsibility to ensure the board decisions optimize the success of the company, if there is a decision that is so important or one where you have reason to suspect some board members hold strong views that would lead to the wrong decision, it behooves you to speak 1-1 with them in advance. This gives you an opportunity to hear their reasoning and for the board member to feel ‘heard’. It also allows you to either adapt your thinking or, if you continue to believe that a different course of action is the right one, to better present the case in your role as leader of the board discussion.