Generally, board meetings of early stage companies tend to resemble staff meetings. There are too many people in the room (try someone from every function?) and much of the discussion is around operational issues — from signing a new lease to branding and logo discussions.
Sure, many companies have limited staff during the first year, and I’d say they have a free pass for the first 6-7 months, max. After this period, critical mass is established and it’s time for the CEO and the company to evolve. Board meetings shouldn’t be operational, rather they should focus on the overall strategic direction of the company.
Seems obvious, right? While every founder and CEO of an early stage company starts with the best intentions of moving forward, sometimes they get into the early stage company slump and never evolve the meetings they way they should.
Let’s start with the functions the board serves: corporate governance, strategic counsel to the CEO, an outside perspective on strategy and direction, and responsibility for the hiring and firing of the CEO.
When you have the board’s attention, it’s important to keep the meetings focused and strategic.
Here’s my playbook for early stage board meetings:
Frequency of Meetings
For the first year or two, board meetings should be once per month. After this initial phase, they should occur every six weeks, and eventually work towards 5-6 meetings per year.
Length of Meetings
Meetings should be a minimum of 2 hours and a maximum of 3 hours. If you need more time, it’s best to check in with board members separately before the meeting, or have a pre-meeting the day before. In my experience, people can’t concentrate more than 3 hours.
I like a minimum of three people and a maximum of five. Two is too few, while three is only getting to critical mass. When the number climbs above five, the meeting looses its effectiveness. Additionally, there should be no more than two from the company present at the meeting; otherwise can turn into a staff meeting (which is a waste of everyone’s time).
- The CEO should begin with a closed session to preview the meeting and key issues with the board.
- Review of key performance indicators that define the health of the business.
- General review of the various aspects of the business focusing on the most important (typically sales, development, strategic partnerships).
- Deep dive on one particular functional area or issue (e.g. competition, marketing and positioning, operations, etc.)
- Financial review
- Closed session to discuss board business or meeting review with the CEO. At this point the CEO should review what the 3-4 key issues facing the business are (i.e. what keeps him/her up at night). This is also a good time for the CEO to review the upcoming period and goals until the next board meeting.
- Finally, a private session for the outside directors to discuss any outstanding issues and decide upon what feedback they should provide the CEO. A spokesperson should be chosen to deliver the feedback following the closed meeting.
You might be wondering, how am I really supposed to cover everything I need? How am I supposed to share everything that is happening in the business? Well, you’re not. The board and these meetings should be viewed as a resource for you, the CEO. These meetings will provide valuable insight from outsiders and will help drive the strategic direction of the company, not the day-to-day decisions that must be made.
If you do need more time, it’s not only appropriate but it’s encouraged that you check in with your board outside of the meeting to give them a heads up on what will be covered or topics of concern.
Remember, the board is there to help you and by focusing on the strategic direction of the company, you’ll only help yourself.
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