Ever wondered what goes on behind boardroom doors? Below, CEOS share the secrets of the care--and feeding--of boards:
What if my board members think I'm an idiot? One common reservation about bringing in outside advisors is the fear of looking foolish. Ironically, that's the point of having an advisory board. "If you don't show them what your weaknesses are, they can't help you," argues Doug Mellinger of PRT Group.
Patty Dedominic, CEO of Los Angeles- based PDQ Personnel Services, remembers feeling sheepish at her first advisory-board meeting. After assembling a high-powered group of local executives to advise her staffing company, she discovered that her senior people had under prepared for the meeting. "Their reports lacked substance," she says. "It was apparent to all of us that if we had put more into the meeting, we would have gotten more out of it." Now that PDQ has $20 million in sales, Dedominic talks to her advisors monthly and sends them written company updates twice a year. At semiannual meetings, senior managers give presentations that include detailed financial information and specific details about key problems. The result? Better advice.
How should I use the time? Focus on important issues - and don't expect a cheering squad. When NetEdgeSystems Inc. was in its infancy, CEO Al Bender asked his formal board of directors for possible solutions to a persistent difficulty. Then he took action, just in time for the next meeting. "I expected applause," says Bender, whose Research Triangle Park company makes telecommunications equipment. "Instead they said, 'That's great. Let's get to the next problem.' They didn't fly 3,000 miles to tell us what a great job we were doing."
If I build it, will they come? Getting high-powered execs to sign on is one thing. Getting them to show up for the meetings is another. "The problem is, you can never pay them what they're worth," says Rick Stewart,CEO of $30 million Frontier Cooperative Herbs, in Norway, Iowa, a distributor of spices and other products. So Stewart tries to make the quarterly meetings of his formal board fun. Since the five outside members have to fly in, Stewart hosts the meetings in appealing locations, like Boulder and the Bahamas - and he pays spouses' expenses, too. The night before, board members are taken out to dinner and later to, say, a comedy or blues club. To keep them happy during the rest of the year, Stewart sends them monthly shipments of Frontier products. "They should feel pampered," he says.
Stan Frankenthaler, owner and chef of two Boston-area restaurants, demonstrates his appreciation by cooking fine food for the five members of his informal advisory board. "It's always something prominent for the season," says Frankenthaler, "like soft-shell crabs."