Nail your Board (Meeting)!

Tips for an Effective Board in Early-Stage Companies

Over the last 23 years, Armilar has participated in dozens of Boards and sat on thousands of hours of Board meetings, with companies in different geographies, industries and stages, from young startups just formed with the founders, to “unicorns” employing well over a thousand people. We can tell you one thing: no two Boards are alike (but many make the same mistakes).

Board dynamics depend on many things. They depend chiefly on the CEO’s experience and his or her need for, and willingness to seek, support and guidance. They depend on the CEO’s preferred communication style. They depend obviously on the composition of the Board, how many members (and observers) there are, who they represent and what’s their incentive to be there, and the type of personality each of them has. They naturally depend on the stage of the company and on whether (or not) things are progressing as planned.

But Boards play an important role in the development of any company. An effective Board is instrumental in navigating the company’s most important strategic moves. An ineffective Board, in contrast, can be a little more than a distraction and a burden for the CEO and the management team. So, it is very important to find a Board model — composition, periodicity, mechanics and dynamics, content and process… — that suits your particular case.

Let’s assume that companies at a later stage will have settled on a Board model, if nothing else, by trial and error and by evolving through different Board compositions and roles over the course of their lives; an experienced CEO will have mastered the management of his or her Board to extract the most value from it. But for an early-stage company, particularly if the founders don’t have a lot of experience in managing Boards, setting up a Board model can be a stressful and intimidating experience. Over the years we’ve tried to help the founders of the companies that we invest in navigate that stressful process, and we’ve started to share those learnings internally. Now, with the feedback received, we thought we’d make this content more widely available to the startup community. So, this post is for you, the founder/CEO of a young startup, in your first (or one of the first) experience(s) in setting up and running a Board.

This matter encompasses many different sub-topics. This text will focus on one: the Board meeting. As we will discuss, it’s not even necessarily the most important — the importance of an engaged Board goes well beyond the formal periodic meetings; but we know that it’s a topic that may cause anxiety to the early-stage, less experienced founders. Board meetings are not meant to be a burden on CEOs and the executive team, but too often, unfortunately, they can consume energy that would be better employed elsewhere. If this sounds familiar, then read on.

Illustration generated by DALL-E 2

In this post, I will suggest a model for Board meetings that we have seen work well on different occasions. Please do note that this is just a model. There really is no “one-size-fits-all” on this matter, so please don’t take it as a prescription. Use it as inspiration, but talk to your Board members about their preferred format and expectations. Experiment in your first few Board meetings and ask for feedback. Adapt and gradually gravitate towards a model that works well for you, one that you feel is most useful for the company — which will probably coincide with one where the Board members feel informed, engaged and adding value.

I hope that you find something of use to you here!

The importance of Boards

Let’s start by establishing this central idea:

Boards matter!

Their mission is to help executive teams develop companies.
A Board works for the company — not the other way around!

Board members have a fiduciary duty to keep the interests of the company first, and their interest second. This means that the Board must always take into consideration the interests of all the stakeholders — not just the shareholders that they often represent, but also the employees, the customers, the debt-holders, the partners and anyone else directly involved in the company. This is meant to alleviate the burden of the CEO and the executive team on the major decisions that may impact several of these constituencies, and on situations of potential or actual conflict of interest between them.

Hence the formal aspect of it. That is why certain matters need to be approved by the Board — you can’t sell the company, contract debt, do an acquisition, or define your own compensation as CEO, without the formal approval of the Board.

But the usefulness of the Board goes (or should go) beyond its formal aspects. Boards are composed of people. People who are there for a reason, who are directly involved with the company (financially, professionally, maybe emotionally) and wish the best for it. People who individually have their own resources, experiences, networks that can be put to good use in favour of the company. Board members (as opposed to Boards as bodies) are people whom you should be able to call individually to discuss any matter that is keeping you up at night. Board meetings, beyond any formal decision that needs to be taken by the governing body, are a great opportunity to get these people in the same room and discuss those matters together, for your, and the company’s, benefit. But Board meetings are just one aspect of an effective Board — an effective Board is continuously involved and you should be able to rely on its members to help you anytime, outside your Board meetings schedule.

In any case, keep this in mind: the Board isn’t running the company! The executive team is. The Board — and each Board member individually — is there to provide guidance and be helpful. Boards are the co-pilot and work with the executive team as peers. Some may differ, but that is our opinion. If you accept this, two main corollaries result from it:

• Corollary 1: for this to work, relationships matter! You don’t need to be friends (although some cases do result in lasting friendships), but CEOs and Board members should invest time in cultivating a professional relationship of mutual trust and respect. Listen to and understand each other’s motivations and concerns. Do lunches. Have coffee.
• Corollary 2: for this to work, information matters! Nobody can be helpful if he or she doesn’t have the necessary information about the company. Management should be transparent about the good and the bad — avoid surprises. It should equip Board members with the right data, and Board members are expected to be informed by the data provided when they opine on a matter. As the saying goes, “without data, you’re just another person with an opinion”!

A few guiding principles for an effective Board meeting

1. Board meetings are not reporting forums

That is the most common mistake — spending hours looking in the rear-view mirror. One-way communication from the CEO to a bored Board. A wasted opportunity to discuss interesting forward-looking matters. Everyone walks away feeling disengaged.

Don’t get me wrong — what happened in the last period is important, in the sense that it informs a company on what it needs to do going forward. That information needs to exist and be known to all, with just as much detail as is necessary. But going over it in detail on a Board meeting, and not using that time to debate what to do next, is wasteful.

Here are a few tips to keep in mind:

• Past performance data (financial, business metrics) needs to be sent out to the Board in advance — at least 72h — as part of the Board package;
• If you have given enough time for the Board to have read it ahead of the meeting, you can and should expect that each member has read it;
• At the Board meeting, have it ready in case of need, but don’t put it on your main flow (unless to make a specific point or inform a specific decision — and in that case, just the partial data that is needed). Ask if anyone has any question or wants to debate any aspect of it, and spend as much time as needed if clarifications are asked. If no questions, move on to the discussion stuff;
• Standardise the format. Make sure you have a consistent way to provide the information. Agree on the key metrics to follow and provide a dashboard that becomes familiar to Board members. This ensures that they understand the information provided without needing to re-interpret each time, and it also minimizes the burden of preparation for you and the team compiling it — after all, it’s the metrics that you’re running the business against, not some numbers compiled just for the sake of the Board. In the metrics, make sure you include a comparison vs. plan (“Where we are vs. where we thought we would be”). Back-up the dashboard with more detailed reports as needed;
• Precede that report with a CEO commentary if needed — particularly if there are meaningful deviations from the plan.

2. The CEO runs the show

Seriously! This is your Board meeting — Own it!

It is your responsibility as the CEO to ensure that information has been made available, that the house is in order, that important strategic discussions are had and key decisions are made. It is the other Board members’ job to be properly informed and engaged in the discussion.

Above all, ensure that you use the Board meeting to the company’s benefit, don’t manage the company for the Board. Take the opportunity to raise your head above the day-to-day operations, take a step back and consider the big picture. From the outside, looking in — are we headed in the right direction?

Here are a few ideas on how to set it up:

• Think ahead about what you’d like to achieve with each Board meeting; set the goals;
• Not every Board meeting is about making a big decision…
  – …Sometimes, you need to provide some context and information on a given topic and just debate, get advice from the Board (e.g., how do we react to a key competitor’s movement? Do we need to adjust our pricing strategy?…)…
  – …Sometimes, you need the Board’s sign-off on something you plan to do, get approval of the Board (e.g., we need to approve the stock option allocation to a few key employees; we need to open a subsidiary in a given country;…)…
  – …Sometimes, you need the Board’s full engagement on a big existential question (e.g., fundraising strategy; M&A; Budget approval and budget re-basing;…);
  – Each Board meeting can be a combination of those cases, but make sure you’re not just in pure one-way presentation mode;
• Own the agenda. Define the sequence of topics, allocate time according to what you think is appropriate. Share the agenda with all Board members, ahead of time, along with the information you’re sending as pre-reading materials (the “Board package”). Ask Board members if they’d like to include other topics and adapt, but be careful about scope creep…;
• Think whether you want to bring in part of the management team, for at least part of the meeting — if there aren’t sensitive matters to discuss, it’s a great way to (a) engage and motivate the team, (b) get the Board members to meet the team, and (c) maybe get more color on some of the data points. But make sure you don’t let that exposure consume Board time you want to use for something else

3. Focus on what’s important

I know. This is easier said than done when there’s so much going on in the company and in the market… But it’s critical to master!

In a Board meeting, time is limited. There are stumbling blocks along the way — things that need to be dealt with but which are not that interesting to discuss. You can count on (engaged) Board members to opine beyond what you’re asking. If you don’t keep the focus on what you want to achieve from the meeting, you may miss your goals.

Looking for tips? Here goes something:

• Housekeeping is a necessary evil of doing business. If you keep your house in order, there is less chance that it will creep into your Board meeting;
  – If house-keeping tasks can be kept off-Board meeting, keep them off-Board meeting (e.g., have the minutes from the prior meeting circulated and signed-off via email, ahead of the following Board meeting);
  – In any case, reserve the time for any required house-keeping measures, as needed
  ◦ You may have them at the beginning of the meeting — in which case you must make sure the time doesn’t run over so that you can move to what’s important;
  ◦ You may have them at the end of the meeting — in which case you must make sure you get that far, at the expense of accumulating a house-keeping backlog.
  ◦ (Who said life was easy?)
• Keep Board meetings at a Board level;
  – Use them to amply debate the more strategic issues — product and go-to-market strategy, company performance, M&A, budget, Executive team hiring and compensation…
  – You can inform the Board on executive management matters — Sales and Marketing, HR, Finance, Engineering… (all of which your Board members will enjoy being informed about) — but if you ask your Board about the color of your new logo, you’ll get responses, and if then an hour is spent debating personal tastes, that’s on you!
• If you need a decision to be made, try not to put it out as an open question. It’s often helpful to structure it as a choice between options a/b/c. Have a well justified management recommendation.

4. Pre-empt and follow-up

Board meetings are not just about the meeting itself. They start well before and extend well beyond.

In dealing with a Board, you’re dealing with the people who compose your Board. They don’t necessarily live your company day-to-day. Sharing information before the Board meeting is useful to get them on the same page, but it’s also useful for you to get a read on how that information is perceived, before and after the meeting. So, do your best to engage with your Board members — that will help them stay involved.

Here are some thoughts on how to set up and run the process:

• Send out an agenda ahead of the Board package. As you prepare to send it, or after you’ve sent it, give each Board member a call. Use the call to:
  – Make sure they have received and read the agenda, and that they will be prepared to discuss the matters at hand at the meeting;
  – Explain your rationale and what you’d like to communicate and achieve at the meeting;
  – Receive feedback on the agenda itself — or see if they have a concern in mind that you may have overlooked;
  – Pre-emptively discuss the matter at a high level and, if you’re seeking a decision, understand where each member stands with regards to that decision — that will make managing the meeting infinitely easier!
  – Identify missing pieces of data that will be relevant to have at the meeting (or sent out before) to better inform the discussion;
  – If you’ve planned an in-person meeting, confirm whether there are members planning to attend remotely — it does affect the dynamics.
• Then follow-up with your complete Board package, at least 72h before the meeting.
• Do the Board meeting! (duh!)
• After the meeting, collect your thoughts and write a short note with conclusions and action points. No need for an essay. Simple, telegraphic, bullet points will suffice;
• This is critical to make sure you align the understandings about the outcome of the meeting — you’d be surprised how different the perceptions may be and how quickly the recollections evolve or dissipate.
• Finally, if applicable, do the minutes of the meeting shortly after — don’t let them accumulate!

5. Plan ahead

It sounds obvious, but it’s often overlooked.

Board members have a job outside of your company. They are part of other Boards; if they’re an investor, which is often the case, they have a firm to run, funds to raise, investments to make. They love your company, but they’re just as busy as you are. And it’s very hard to find a common available slot on the agendas of a group of very busy people.

So, planning is an essential part of a fluid Board meeting process. Sure, plans are broken and need to be constantly adapted, but planning makes things easier to manage.

Here are some planning tips:

• Depending on the stage of the company, you can be on monthly Board meetings (very early-stage), on quarterly meetings, or on any other periodicity that you and your Board are comfortable with. If the meetings are far apart, it’s probably a good idea to do more informal touch-base meetings in between. In any case, plan in (very) broad strokes what you think will be the scope of the discussions. For example, plan to discuss the budget for the following year at the Q4 Board meeting; do a deep dive on the business at the end of Q2; etc.;
• Late in the year, propose a Board meetings calendar for the following year, when it’s still relatively easy to find slots where everyone is available. Send out calendar invites for the year to make sure everyone has them;
• End each Board meeting with a confirmation of the date / time for the next Board meeting;

But don’t be paralysed by planning, either. Startups move at a fast pace, and your Board members know that. Be prepared to schedule an impromptu Board call to discuss a pressing matter, and expect the same level of engagement, even if not everyone can attend.

The Board meeting deck (not a template!)

Maybe you’d expect a Board deck template at this point. Sorry to disappoint you…

It’s just that everyone, every company, will follow a favourite model, with no two alike. So, I’m not making this a template, on purpose. It’s just a suggestion of a potential flow that follows the guiding principles that were previously laid out. Still, I’ll try to compensate that disappointment with some placeholder graphics, just for illustration purposes.

It’s often a good idea to start off with…

Over time, this may feel redundant and a slide to skip over, but I find it useful to set the tone and get people more focused on the ultimate goal that everyone is striving to achieve. Plus, if you use it regularly, it will make for interesting history to see how it’s evolved over time!

Now on to the…

Remember: you’ve shared the agenda in advance, so it should come as no surprise to anyone paying attention. If there are any changes relative to what you shared, simply explain and justify.

Note that points 2 to 4 in that illustration are the key discussion topics you want to cover. They can either require a Board decision or simply be a matter about which you just want to obtain guidance. No more than 3 discussion points is ideal; 2 is better. Formulating them as a question is often helpful.

It’s also useful to highlight the points of the agenda where you need a decision to be made from your Board and describe them broadly. This marks a few spots that you absolutely need to go over during the session, so that everyone knows what to expect with regards to time management. And speaking of managing time, I also find it useful to communicate your expectation of duration for each topic — not just to ensure you get to the end of what you need to cover, but it also says something about what you view as more important things to discuss.

On to item #1 of the agenda:

This is very relevant if done well. The role of this section is to give context and have everyone on the same page for the important discussions that you want to have at the Board meeting. It is a reflection of the general “state of mind” at the company and it pretty much sets the tone of the meeting, so put some care into what you want to communicate and how you want to communicate it.

Ideally, this should be backed-up by a good dashboard…

This is not necessarily the whole Board package about the current state of the business. It’s just your top-level dashboard with the north-stars and other KPIs over which you can draw the picture of the overall status of the business. This will be in a format that the Board is familiar with, and it should be the same as any monthly updates that you send out (if you’re doing that, which is a good idea to the Board up-to-speed in-between formal meetings). If there are changes to that format, highlight and explain.

In principle, you will have sent the Board package with the more detailed information and financials beforehand, and Board members are expected to have read it. So, use this dashboard to highlight important points from your commentary, and include backup slides with more data if there is a critical indicator that needs digging into. Ask if anyone has any questions about the more detailed information (and have it readily at hand in an appendix), but don’t include it here.

If relevant, this section can also include a qualitative or quantitative update on how the company is evolving…

…but only to the extent of what’s relevant at the time of the Board meeting, if there is something noteworthy. Include a slide for each of the major areas, or as many backup slides as you deem necessary. But once again, avoid getting caught in discussions that are beside the key topics that you want to discuss.

You can also use this section to include an ask for help…

…for example, to leverage your Board members’ network, but don’t go into too much detail or spend time dwelling who has the best contact — just identify who can help and then take the discussion off-Board.

Now, to the meaty stuff: the discussion points. This is where you, as the CEO, want to spend the most time on. The discussion topics should constitute the bulk of the Board meeting. It is based on the output of these discussions that you, your team and your Board members should judge whether this was a useful, productive session.

Start by framing the topic. What’s at stake? What are you looking for in terms of discussion? I find that framing it as a well-formulated question is often helpful.

Also, if you need a decision or approval from the Board, then clearly state that upfront. If you just want to collect opinions and advice, say so as well.

Sometimes, a slide with a well-framed question is all it takes to get a fruitful discussion going. Sometimes, your board will need a little push with a little more information…

If that is the case, feel free to include slides with any data that you feel is relevant for the Board to know in order to have an informed discussion (and remember, if you have distributed this in advance, they will have likely gone through it and have had some time to form ideas or opinions…). If appropriate for the topic at hand, it’s also useful to identify and expand on available options. This will help focus the discussion. Finally, if you seek a position of the Board, rather than just collecting input for your processing, have your own (or your executive team’s) view and position laid out and justified.

Then, rinse and repeat for discussion topics #2, #3…

Ok. Now that you’ve collected what was hopefully a useful input for the most pressing questions facing the business, time for some quick housekeeping. It is a necessary pain of running a business… If there is stuff that can be done outside of a Board meeting, then do it outside rather than use the precious time of the meeting (for example, approving minutes by email); but some things may simply require it from a formal standpoint (according to your by-laws, for example), and others may merit discussion that you want to keep as a Board meeting matter. As previously mentioned, some prefer to do the housekeeping right at the beginning of the session to get it out of the way, rather than risking running out of time to cover these needed (if not very interesting) matters. That’s fine, and I’m not advocating for one or the other model here. It really depends on your Board’s dynamics. Just make sure you get to it, at the cost of accumulating a lot of admin debt that you will need to address sometime…

Once again, remember that the needed information will have (hopefully!) been shared beforehand, but feel free to include backup slides as needed. And don’t forget to (graphically) mark the topics that you need to have an approval or decision on.

Time to wrap things up!

I find that it’s often a good idea to take a couple of minutes to verbally summarize your key take-aways from the meeting and the most immediate action points that you and other Board members will be following-up on. If needed, don’t be shy to ask for a minute or two to collect your thoughts in silence before doing so — there’s probably a lot to take in! But it is very useful to align everyone on how it all went — once again, you’d be surprised as to how disparately different Board members can read the same Board meeting!

Close the meeting by confirming the date for the next Board meeting, to make sure it is in everyone’s calendars.

Yeah, right, but…

I know what you’re thinking. Easier said than done! You’re right.

It is extremely hard to make it all come together and manage to cram into a 2-hour Board everything that you want to achieve with it, manage timing, information flows, different interests, disparate levels of preparation, varying degrees of participation, trying to herd Board members like cats into your scheduled timeframe to then find out someone didn’t show up or has to go before you have a chance to wrap things up… I know. Managing the whole thing is more art than science, and you’ll often get the feeling that you’re spending time managing your Board instead of running your business, which is what your Board should be asking of you! Honestly, very seldom do Board meetings manage to go through this kind of a script successfully.

But when, often through trial and error, Boards settle on a model that works for everyone — and most importantly for you the CEO –, then Boards can become a powerful instrument and sometimes even a competitive edge.

Hopefully, you will find something in the ideas above that will help you set sail in the right direction, to find the Board meeting model that adds the most value for you and your company. If you do, let me know! I’d love to hear your thoughts!

Authored by Pedro Ribeiro Santos, Armilar Venture Partners