By Louis Lehot, business lawyer and partner at Foley & Lardner LLP in Silicon Valley, and formerly the founder of L2 Counsel, P.C.
As your company grows and has completed its first venture capital fundraising round, it is customary to include one or more outside investors on your board of directors. As your company enters this stage, board meetings will become formalized events engaged and effective dialogue between the company’s executives and its board of directors.
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The following are 9 considerations for structuring and promoting a productive board meeting.
- Determine how often your board of directors should meet. You want to strike the fine balance between keeping the board engaged throughout the meeting without the time commitment for preparation and attendance becoming unreasonable or inconsiderate of board members’ busy schedules. Meeting quarterly, at the minimum, is advisable.
- Prepare your board deck to serve as a meeting outline.Your board deck should provide an overview of the areas of focus for your company and what will be covered in the board meeting. You want to include an financial report covering current capital, capital projections for the upcoming period, and a calculated future capital prediction. In addition to financials, the board deck may highlight concerns regarding operations, development, competition, legal matters, or additional matters of business that require the board’s approval or feedback.
- Provide sufficient time for the board to review the board deck. The board deck should be circulated a minimum of one full business day ahead of the scheduled meeting to ensure board members have time to look through the material that will be covered. Delivering the board deck immediately before the meeting not only prevents the meeting from running as efficiently, but also reflects poorly on the company for a lack of organization.
- Schedule regular updates with the board so there are no unexpected surprises. When unexpected developments occur, it is important to inform the board prior to these concerns being brought up in the board meeting. Being candid in regards to unforeseen challenges or concerns facing the company allows the board generate feedback and prepare strategies that can help the company overcome the challenges. The board is there to guide and assist when challenges arise, don’t be afraid to utilize this.
- Spend more time focused on one or two areas where the company excels or struggles. The board deck serves as a meeting outline, however, rather than skimming over every area of focus of the company during the meeting, it may be more effective to give the majority of the meeting’s time to acutely address one or two areas where the company has excelled or struggled since the previous board meeting.
- Don’t waste your board members’ time. Your board members have busy schedules. Board meetings should be no longer than 3 hours, to ensure the meeting stays focused, efficient, and respectful of everyone’s time.
- Include your company’s leadership team, not just the top two executives. While the CEO and CFO should be present at all board meetings, the board meeting is an excellent platform to introduce the entire management team to your board. If a board meeting will be more focused on matters dealing with sales, for example, having the executive in this area present their concerns will allow the board to view the company from a more organizational standpoint and see what areas of the leadership team need to be developed.
- Make a note of questions, suggestions, and advice brought up by the board. When your board members are engaged in the meeting, they will be asking questions, giving task suggestions, and providing advice. It is important to show your board that you value their input by providing a follow-up on their recommendations at the next board meeting.
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- Showcase your company culture to build and maintain your relationship with the board. Activities beyond the board meeting can help build a meaningful and lasting relationship with board members. The board of directors is a great asset to a company’s growth and ensuring this relationship is built on trust and transparency can help when the company faces greater challenges.
