You are a startup CEO, you have raised some seed capital, now you have a board, and you have your first meeting coming up. That is good news for you, your business, and your investors. It may seem daunting and extra work on top of everything else you have to do.
I hope you will come to see having a board as a good thing, because you will:
Get to step back from the day-to-day challenges and have a clear view of your opportunities and challenges
Benefit from the perspective of experienced people who know different parts of the business, care about results, and have a fiduciary responsibility to your shareholders
Take care of important details such as board resolutions, cash flow statements, cap tables, etc. now, rather than later when investors may require them and you forgot important items
Get help laying out the most important milestones and projects for your business, so you can focus your time more efficiently
Multiply your credibility with investors, customers, employees, and others with the collective weight of the board members behind you.
There may be several types of people and roles for the meeting, including:
Chair. The Chair or his/her designate will run the meeting.
Board Members. Ensure you invite and try to accommodate the schedules of all board members, and know how many constitute a quorum under your bylaws.
Secretary. Someone needs to record the minutes.
Observer Board Members. Some investors or advisors have rights to be observers, which usually entails them to get all the information shared with the board, to attend meetings, but not to have a vote.
Management Team Members. It is often appropriate to bring senior team members into the meeting for designated parts of the discussion. That contributes more knowledge to the discussion. It helps board members know the team. And it can be great exposure for a team member.
Your meeting is fast approaching. What do you have to do? Let’s look at in four stages: pre-meeting preparation, in-meeting discussion, post-meeting follow-up, and between meeting activities.
Ensure the meeting is on everyone’s calendar, you have confirmed their attendance (in-person or by phone), then distribute a board package about a week ahead of the meeting. The key components of that package should include:
Meeting logistics - time and place, meals
Agenda for upcoming board meeting
Minutes of prior meeting -- for approval
Resolutions to vote on at meeting
Summary of the business situation. That would include sales status, product status, team, KPIs, and status of milestones identified at the prior meeting. Document format is fine for this because content trumps format.
Financial and cash flow statements. Include a copy of the most recent bank statement.
If you believe there are some important strategies to decide at the meeting, it is best practice to meet or talk with board members one-on-one in advance of the meeting to get their views and enlist their support. While board meetings need not be scripted, it is usually helpful to avoid having surprises or springing contentious issues on board members.
Official board meetings can run from a 10-minute conference call to pass important resolutions to multi-day sessions. For a startup most of your meetings will last two to three hours.
Most board meetings have three major parts.
Vote to open meeting. Note who is present (in person or by phone). Note time
Vote to approve agenda
Vote to approve the minutes of prior meeting
Vote on resolutions, such as financing, employment agreement, or stock option grants
Talk openly about the status of the business, options, and best strategies
Take no or few notes for purposes of board minutes.
Avoid voting on outcomes unless it is legally required, or if you want to get a sense of which course the members prefer
End up with agreement on milestones and responsibilities for the next meeting and beyond
Agree on timing and form of next meeting
Formal vote to close the meeting
Immediately after the meeting the CEO should:
Work with the board secretary to write and circulate a set of draft minutes, while the memory is still clear. Ask for any errors or omissions.
Send out a meeting invitation for the agreed time for the next board meeting, to ensure you lock in the time early.
Share any high-level outcomes with members of the management team. They might be anxious to hear whether there are any changes of course.
Replan activities in line with the agreed priorities and milestones for the coming months. Stop or curtail activities that might have seemed important before but are no longer priorities.
Rather than forgetting about the board meeting until the next one comes along, keep the meetings in mind every day. Ensure you track progress vs milestones, knowing you will be facing the board again in a month or two, and will need to describe your progress.
That does not mean for you to execute the plan regardless of significant changes. If new opportunities or threats come up, shift as appropriate. Drastic changes may cause you to call for a special board meeting. Less dramatic ones may cause you to adjust your priorities, while thinking through how you will justify the changes with the board at the next meeting.
It is good practice for you to keep a file in which you can add topics for the next board meeting as you think of them. That will make your preparation for the next meeting easier.
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I hope you find as I have that a great board of directors is an asset, and takes a significant weight off your shoulders.