There are reams of advice out there on how you should pick the perfect dream board. For early stage startups this advice is mostly nonsense. Later stage companies can pick a dream board but early stage startup boards don't have a lot of flexible slots open to allow for shaping.
Startup boards are typically fairly small (usually three or five directors) and they virtually always contain one or two directors who are management (founders), one or two directors who are investors, and one independent director, hopefully someone with industry expertise. Given that formula, there is obviously not a lot of room for creative tinkering.
You can shape it by choosing good co-founders to build your business with, by choosing good investors and selecting good investor representatives for your board, and by being thoughtful with the selection of the independent director. But the main way you are going to shape the joy and value you get out of your board is by knowing how to hack the board process to your benefit.
There are four basic aspects to hacking your board:
- Preparing well for meetings;
- Running good meetings;
- Insisting on good director conduct; and
- Leveraging your board cycle for investor relations.
We will cover all four in this series, starting with meeting prep.
How to Prepare for a Board Meeting
Pick and set a smart calendar
Face to face meetings are the most impactful, but it takes advance notice to make in-person meetings happen. Set a schedule that looks out a year in advance and try to revisit and extend it a couple times a year so you are always booking a year or more out when calendars are more open. For most companies, monthly board meetings are too frequent and quarterly is too infrequent, so a good approach is one longer face to face meeting per quarter with one shorter telephonic meeting in between. Try also to add a team-building board dinner the night before two of your four in person meetings per year.
Write a good agenda
A good agenda is short and clear. It should contain standing items like review of the previous meeting's minutes, a quick review of the dashboard, and approval of any option grants. But its focus should be on the one or two deep discussion items, with an emphasis on forward-looking strategy questions, not implementation details and tactical issues. They should not burn a lot of time on backward-looking reports and accomplishments. And when you write your agenda, make sure to mark each item as being for information, for discussion or for approval - it gives focus and clarity to each section of the meeting.
Get a good board package out
If you want your meetings to be strategic and forward-looking, you cannot spend the entire meeting conveying basic information about the company and its recent performance. This is the primary job of the board package. The secondary job of the board package is to protect the company and the directors from liability by demonstrating good process, good information, and the opportunity to consider matters in advance so directors have time to think before they vote on them. A good board package will update the directors in standard format and provide them with the materials and considerations they will need to come to the board discussion educated and prepared.
It is also very helpful to report business performance based on Key Performance Indicators (KPIs). A management dashboard that highlights KPIs is an essential tool for evaluating company performance against targets in an objective way. To allow for comparisons, include the history of performance over the past year, a comparison of performance relative to plan and forecasts going forward. Spreadsheets are fine for financial data, but charts are a better visual tool for spotting trends and sparking discussion. There are several items that most board packs have in common: 1) minutes from prior board meetings, 2) financials and 3) slide deck with key strategic discussion topics and company status update.
Set reasonable expectations
There are two different sets of expectations at play. You need to think through your expectations of both the meeting and the directors themselves. Being reasonable about what you can accomplish at a meeting goes a long way toward being satisfied with the result. In reality you are going to be lucky to have one really successful in-depth discussion at a board meeting, let alone two. It can take some time to get everyone on the same wavelength, using a shared vocabulary and accepting the same assumption set. Overcoming biases and unhelpful pattern recognition is always a challenge, and getting people to load a common set of variables into their "mental RAM" can take some time and effort. Try to be patient and focus your efforts and your preparation on getting one good in-depth discussion per face-to face meeting.
Your expectations of your directors themselves can and should be more exacting. It is reasonable for you to expect them to come prepared. It is reasonable for you to expect them to help, and to expect them to have done the tasks you asked them to do at previous meetings. We will talk more about director conduct elsewhere in this series, but hacking good board prep includes insisting on good advance prep and work from the individuals themselves.
Next we'll tackle how to run a good meeting.