The Board Of Directors: Board Meetings

Posted on by Fred Wilson & Jason Li


The Board Meeting is the primary way that Boards function. This post is about making Board meetings effective and helpful for everyone involved.

A Board cannot be effective if it doesn’t get together frequently. Some Boards meet monthly. I like that approach when the Company is young and there are a lot of changes happening frequently. But for most companies, a monthly Board meeting will be overkill.

I’m a particular fan of the twice a quarter Board meeting. The idea is to have one meeting mid quarter and one meeting after the quarter has been completed. A lot of public companies use this format since the Board needs to review the quarterly numbers before they are reported to the public. I think eight meetings a year is a great heartbeat for a Board and this schedule works well for all kinds of companies.

Some Boards only meet once a quarter. I am on a few Boards that meet face to face once a quarter. I generally encourage those Boards to meet over the phone for an update in between the face to face meetings. Those update calls/meetings are less formal than a full Board meeting but they keep the Board engaged in the business and connecting with each other.

Board meetings should be discussions. They should be interactive. They should have some structure. But they should not have too much structure. Some CEOs and Board Chairs make the mistake of driving the Board line by line through the agenda, cutting off meaty discussions in the name of staying on schedule. The purpose of Board meetings are to have these meaty discussions not to get through the agenda on time.

I prefer that the Board get all “official business” out of the way at the start of the meeting so that the meeting doesn’t have to get cut short to approve stock options, minutes, or some other important but perfunctory Board resolution.

Once the Board has done that, the discussions can begin. The CEO should tee up the discussions. There should not be too many topics. I think three or four are good. One or two can be tactical items. But most of the discussion items should be strategic and thorny questions that the business must tackle to be successful. Good examples are “what is the ideal business model for our company?”, “can we be in two businesses at the same time?”, “do we need to build, own, and operate  our payments system to be successful long term?”, and “can we build a sustainable business long term operating solely on Facebook?”. Note that all of these are questions.

Board meetings should last two to three hours. I think two hours is too short. But more than three hours of intense discussion will turn most brains to mush. So you can’t go on too long either.

There are a few techniques that I’ve observed over the years that I like a lot. The first is that the Board deck should be sent out three or four days in advance and it should include all the important financial and operational results for the Board to consume in advance of the meeting. It should also tee up the big discussion items so that the Board can start to think about them in advance of the meeting. The Board does not need to go through a line by line review of the financial and operational results in the meeting. But the CEO or Chairman should ask the Board if there are any questions on the numbers and time should be set aside in the event that the Board would like to have a discussion of the operating results.

The second technique I like a lot is when the CEO puts up a list of the three or four things that are “keeping me up at night” at the start of each meeting. This can be a way of teeing up the discussion items for the meeting. Or it can just be a way for the Board to get into the mind of the CEO quickly. The best way that I’ve seen this done is the “keeping me up at night” slide shows the items that were on the slide the prior meeting and the items that are on the list currently. That shows what things have been “resolved” in the time since the last meeting, those things that have not been resolved, and the new things that have popped up.

Possibly the most important technique I’ve observed over the years is the executive session at the end of the meeting. This is when the Board meets without the CEO and team in the room and has a discussion of the meeting and what the key takeaways are. The executive session can be five minutes or it can be a half hour. Sometimes there is very little to discuss in executive session. Sometimes there is a lot. After the executive session ends, the CEO should either be invited back to have a debrief on the executive session or the Chairman of the Board should meet with the CEO to debrief on the executive session. This is an opportunity for the Board to provide feedback to the CEO on the business, the team, and performance, and the strategy. Boards should not miss this opportunity to provide feedback and CEOs should demand it of them.

In summary, Board meetings should not be operational reporting sessions with information flowing one way. They should not be for the benefit of the Board. They should be for the benefit of the CEO and the senior team. I’ve always loved the idea of a “kitchen cabinet” and to me that is what a great Board meeting should feel like. The Board should be a set of experienced, engaged, and helpful advisers and Board meetings should be a place and a time for that group to provide the most help and assistance they can. It is the CEO and Chairman’s job to make sure that happens and it happens on a regular basis.


From the comments

JLM chimed in with a wealth of specific details:

Let me give a little different view from the perspective of a CEO.

First, everything that Fred says about the formative years of a company are absolutely correct. Fred is perfectly correct as usual.

Much depends on how much “nurture” a CEO requires.  How experienced the CEO really is and whether he really is a CEO or just a poseur.

Nothing wrong w/ learning on the job, right, Barack?

Boards exist to make policy, not to run a company.  Policy.  Policy. Policy.

Management exists to execute policy.  Board picks the azimuth, management guides the tiller.

Boards should focus on a list of annual and quarterly deliverables — Strategic Plan (1, 3, 5 years), Annual Plan, Staffing Plan and the deliverables unique to the then current challenges whatever they might be.

Boards exist to serve the interest of the shareholders and not to run the Company.  The Board is responsible for hiring, inspiring, motivating and guiding the CEO but not for being the CEO behind the curtains.

Boardmembers are typically paid for their service — in addition to the capital gains they will likely reap — and as such should earn their pay.  This is why they should have a written Board Charter, written committee (nominations, compensation, regulatory, audit) charters, an ethics policy and other written documentation that is consistent w/ the direction given by the SEC to public companies — even when they are private.

Independent director meetings.

Boards as a rule are pretty damn lazy about the above and I would put a boot up their collective asses and remind them they are PAID for their service and I would expect them to earn it.

Boards should speak w/ a single voice.  The poor CEO should not have to deal w/ seven different egos.  Boards have to be smart enough to have one Boardmember who is the “go to guy” both from the perspective of wisdom — please, please, please make it someone who has been to the rodeo before — and style.

Someone who can coax a great performance out of a CEO. Even if the CEO has pimples.

This gray haired eminence should be like a golf coach who can help a damn good golfer become a great golfer not by having seven different guys talking at the same time but by having a single calm, shrewd voice who can make that minute change that is going to mean the difference between a nice high draw and an amateurish slice.

Most Boardmembers are not smart enough to be a coach.  They are simply not guileful enough to do it right.

If I am on your Board, when I am the most concerned, I am the calmest possible because my angst does not make your job easier.  I will try to make my calm increase the possibility that you will find the way.  I will make you more confident and not add to your burden.

I will be your safe harbor in this messy bitch of a storm we have created together and I will help you get out of it. I will do that for you and for me.

In general, the Board will overstep their boundaries on a regular basis and a good CEO has to look to Board members to discipline themselves.  Someone should speak up and say — hmmm, perhaps we are a bit far flung from the issue of policy.

Boards have to follow a very organized approach —  board book out 3 days ahead of time and an agenda including the following:  minutes, financial, acquisitions, regulatory, litigation, legislation, staffing, banking, cash, capital structure, insurance, benefits, resolutions, parking lot issues, education topic, brainstorming and set the next meeting.

Don’t discuss everything only what is needing to be discussed.  Takes 3 hours.

Go eat.  Have a civilized conversation.  Get everyone to talk about themselves a bit. Get rid of the freakin’ Crackberrys and have a glass of wine. This goodwill will be cashed in at par on some future date.

Dare to be excellent.  Excellent.

Try to be the nicest guy in the damn world because being a prick does not increase your probability of getting the tough stuff done. A guy will die for a colored piece of ribbon but he will not work for a prick.


This article was originally written by Fred Wilson on April 2, 2012 here.