Unless you've gone public you probably don't have a conventional board of directors, but maybe your "board" is an informal group of advisers. Or maybe your board is made up of minority investors. No matter what, your board should not only provide some form of governance but also advice, strategic input, and the benefit of their connections.
So how can you ensure you establish a good working relationship your board members if you've never worked with--or been on--a board before?
For input I talked to someone with direct "first time" board experience: Jim Whitehurst, the president and CEO of Red Hat, a $1 billion-plus open source software and systems company. (If you're running Linux, odds are good it's Red Hat.) Previously Jim was the COO of Delta Airlines, so when Red Hat hired him it was his first experience working with a board of directors.
Here's Jim's advice for building a beneficial relationship with your board:
1. Educate and truly inform.
Many people go into it assuming the board really understands the business--but the board isn't there on a day-to-day basis. They have other obligations so their feel for the business tends to be general, not comprehensive.
And here's what happens: You hold board meetings, you talk, everything's hunky-dory... until there's a problem--and then there's a problem.
The first time you face a tough call, your board naturally wants to thoroughly understand the situation, and that's when you realize you should have done a better job of communicating all along, because then you not only avoid surprises, your board feels they have enough information and knowledge to make that tough call.
For example, about six months into my tenure at Red Hat I wanted to spend nine figures buying a virtualization company that had almost no revenue. We needed virtualization technology, but when you just say, "We need virtualization technology" to the board, they naturally say, "Whoa. Hold on." I quickly realized I had not spent enough time making sure they really understood the business. We had talked about many things at prior board meetings, but not enough time on fundamentals of the business.
Your primary job is to make sure your board is well informed enough and educated enough about the business so that they have questions about a decision--but not how that decision fits into the strategy. If you've done a good job communicating along the way, they'll already understand strategic issues.
2. Create context during meetings.
I also sit on boards. We'll go into a meeting and I know there are 100 things going on... so why did the CEO pick these three to talk about? Of course you talk about standard things, but there are always specific pieces of business to discuss.
Your job is to create context, and that context usually falls into three basic categories:
1) We did something well, so let's celebrate success and recognize achievement.
2) We have a problem and I need advice on how to fix it.
3) Here's background information that will help inform future discussions and decisions.
Don't just think about the objective of the presentation. Consider the context of how you are using the board's time, and help them understand that context. Then they can respond appropriately.
3. Create value between formal meetings.
I often have valuable interactions at formal meetings, but where I really get value is when I can call a board member for help with an issue. Maybe I have an HR issue, and one member is particularly strong with employee relations. Or maybe it's a tech issue, and another member is perfect for that discussion.
Collectively your board is a resource, but the individuals are also resources.
One-to-one and two-to-one discussions are often where you can really gain knowledge and value. Governance is of course valuable and required, but advising me and giving me their perspective and context and wisdom is unbelievably important. Try to interact three times as much with your board outside of the formal meetings as you do during formal meetings.
4. Be open about mistakes and problems.
You can generally control the topics of board meetings, and it's human to keep the bad news to yourself.
It's human but it also wastes an opportunity. Sharing good news feels good, but it won't make you better. You get real value from talking about concerns, problems, and mistakes. People want to serve on boards to be helpful, to make a difference, and to make things better. You can't make things better if there aren't problems to solve.
Anyone you want to serve on your board has enough perspective to know you aren't perfect. So open up: Take advantage of the trust you've built with informal interactions outside the formal meetings.
5. Invite feedback.
Don't just ask for feedback on open issues. Ask your board what they're concerned about. Ask how you're doing.
Most people don't join boards in order to fight or create conflict. Generally speaking, board members have a tendency to let small issues simmer until they reach a boiling point. Then it's really hard to put the genie back in the bottle.
I've heard CEOs who were let go for what they considered to be minor issues say they had no idea their board was even concerned about those issues. In some cases you won't get feedback unless you ask--and are willing to listen.
Instead of assuming no news is good news, approach it this way instead: "If it's bothering you, it should be bothering me."