December 14, 2017
PUBLISHED BY Edward Sullivan & John Baird, Velocity Group
In an ideal world, the most open and least stressful relationships startup founders have would be with their board members. Unfortunately, for many founders the exact opposite is true. According to recent research we did in conjunction with Wildcat Venture Partners and the Traction Gap Institute, less than 50% of founders agreed very strongly with the statement, “I can share my honest worries and concerns with the board.” This is consistent with our work with some of the fastest growing startups in the Valley where founders tell us managing the board is actually one of the most stressful parts of their jobs.
Why is this? Maybe it’s because board meetings are the one time every quarter (or every month!) when founders worry about being judged and potentially fired. The truth is, board members want to “manage you out” as little as you’d like to go, and your skill at running good board meetings is one of the best ways to keep the board “in the tent pissing out, rather than outside pissing in” to quote the colorful late President Lyndon Baines Johnson.
Most founders we have worked with find building a new product more straightforward than running a board meeting. Lucky for them (and maybe for you), we have developed a rather simple road-map to prepare for and manage board meetings. Using this guide, you can have board meetings that actually add value to the company and leave both founders and board members alike feeling like it was 3 hours well spent, rather than a meandering, nerve-wracking mess.
As we wrote previously, the best board/founder relationships are the transparent ones – the ones in which both board members and founders can troubleshoot what’s hard, take shared responsibility for growth, and celebrate incremental successes. Nothing is more satisfying for a VC than looking back at a big exit and saying, “We really put our all into that one.”
How to run Board Meetings that keep board members “in the tent.”
TWO WEEKS BEFORE – Call for Agenda Items
Two weeks shy of the board meeting, reach out to Board members to ask them for topics they’d like to see covered at the meeting. This isn’t asking them for the obvious, or asking them to write the agenda. It’s simply, “In addition to our standard agenda, are there other items you’d like to discuss?”
Using the Board Triangle (above), think about the portion of time you want to divide between reporting, leadership and strategy. Once you review the input of board members decide which are “board worthy” topics and which are “subcommittee topics.” Some board members want to micro-manage and discuss every hire. You’ll want to set very clear standards for what kinds of topics end up on your agenda. When you do not include a board member-requested topic on the agenda, let him/her know “why” you are covering some topics and not others.
|Board Meeting Worthy Topics||Non-Board Meeting Worthy Topics|
|Growth Forecasts and Progress||Specific Growth Tactics|
|Product Strategy||Individual Product Features|
|Hiring Plan||Non-Executive Level Hires|
|Employee Equity Pool Size||Individual Comp Packages|
|Fundraising Plan||Day-to-day budget|
ONE WEEK BEFORE – Share the Board Pack
Four or five business days before the board meeting, send out a four or five page document with all relevant information to cover key topics and make important decisions.
Make sure the pack has a cover page that indicates:
- What are the topics to be covered/discussed
- Why each topic is important
- What action/decision/outcome you want from the discussion
- Frame 3-4 questions for the Board to think about as they are reading the board pack.
Mike Maples from Floodgate Capital says there are really only four questions that need to be answered at a board meeting:
- Has the market changed since we last met?
- If so, did it affect us negatively or positively?
- Has the team changed? For better or worse?
- Has our position in the market changed?
- Did we do what we said we would?
We would add three more questions:
- What’s next?
- What keeps you up at night?
- What can the Board do to help?
(Left: Ugly Powerpoint Slides that need lots of explanation
Right: An elegant board pack that has all relevant info, but is still easy to read
In consideration of all of the above, your board packet should contain the following sections:
- Executive Summary
- Top highlights (Big Sales, Product News, Customer Stories)
- Top challenges (Sales, Team, Product, Market Forces)
- Cash-on-Hand and Runway
- User Growth & Retention
- Relevant Funnel Metrics
- NPS/Customer Feedback
- Changes in the Landscape (Porter’s Five Forces Can Work)
- Macro-Level Forces
- Competitive Forces
- Supplier/Vendor Forces
- Product Update
- What’s working/What’s not?
- Team Update
- Major Hires
- Major Changes to Org Chart
- Major Topic 1
- Summary of the first item you want support/decisions on
- Major Topic 2
- Summary of the first item you want support/decisions on
DURING THE WEEK BEFORE – Board Member 1-on-1s
Meet with or have a call with every board member to discuss what’s most important to each of you and get clear on how they will vote on any difficult or uncertain issues. We can’t underscore this enough. A board meeting is no place for surprises. So, make an effort to get clarity on everyone’s positions before you head into the meeting.
TWO DAYS BEFORE – Final Agenda Construction
Board packs are out and being read. You’ve had pre-meeting meetings with each board member to get clarity on his/her positions on contentious issues. Now, it’s time to make the final agenda.
Our friends at Sequoia came up with a fantastic minute by minute summary of how to use your time at a board meeting:
You’ll notice that there is minimal Board agenda time used on just reporting. Board members can read this in Board materials and ask questions if needed.
MANAGING THE MEETING ITSELF
At the outset, as part of your “Big Picture CEO Update,” be sure to overview the agenda, the specific outcomes you would like to achieve and decisions you would like made. State your interest in having lively and healthy debate. We call these “left-hand column” comments. The right-hand column is the stuff that is easy to say. The left-hand column is harder to say, but that’s what makes it important.
Throughout the meeting, capture action items and key decisions made. Don’t be afraid to assign specific tasks to specific board members. As stated before, board members are much more likely to remain involved and be helpful when they feel like they are more than just an ATM machine. Lean on them for actions, not just money and advice.
At the end of the meeting, get feedback from the Board on “what worked” and “didn’t work.” Make note of their comments and make changes that make sense to you for the next meeting.
MANAGING YOURSELF DURING THE MEETING
First off, sit down at the table with your fellow board members. If you stand at the head, you are mimicking the “founder pitch” scenario and putting the board in the position of listening and judging. Sit down in the middle of the long-side of your conference table, so you are as close to as many board members as possible.
Second, try to demonstrate “active listening” as much as possible — letting Board members know that you have heard and understood their comments.
Third, don’t waste time reviewing information that is in the board packet. If a Board member asks for a piece of data that’s in the board pack, gently remind him/her is in there. It will be obvious to the rest of the board that said board member came ill-prepared and it will be less likely to happen again.
Fourth, keep an eye on the clock. Be sure to manage your time as you navigate movement between updates, leadership and more strategic deep dives (See Board Triangle above).
And finally, don’t feel you have to have all the answers; use Board members during meeting as needed.
AFTER THE MEETING (Follow Up Email)
Although it goes without saying, you should follow-up with a summary email after every Board meeting. This should include:
- Decisions Made
- Action Items Assigned
- Goals Agreed To
- Next Board Meeting Time & Place (of course a calendar invite should be sent, as well)
- Ask what went well and what didn’t — which according to our research is something VERY few founders do well.
At the end of the day, your relationship with your board will depend much more on how you manage them, as opposed to how you allow yourself to be managed. Smoothly run board meetings show professionalism and inspire confidence. Sharing what’s hard, as well as the workload allows board members to feel like they are “in the tent.” Trying to prove your competence or shielding the board from what’s actually going on inside the company will only weaken your relationship with them.
If you’d like to talk more about board meetings, founder dynamics, or anything else regarding scaling yourself in order to scale your company, please reach out to us: firstname.lastname@example.org.