In Part 3 below we discuss how to conduct more effective board meetings to help you get more out of your board.
Part 3: Getting the most value out of a high-quality board of directors
Form a good board, then utilize it
In parts 1 and 2 of our series we covered the first two steps to turning your board of directors into an asset instead of an obligation. It started with understanding and separating the roles of the board of directors from the managers and shareholders. Next, we spelled out the importance of putting the right people with valuable experience and expertise on your board. Once you have identified and secured the directors of diverse backgrounds that will constructively challenge your team and your business to improve take the next step with your board.
Do not settle for one meeting at the end of the year just to say you had a meeting. Find a meeting cadence (I recommend at least twice per year, but preferably quarterly) and identify the key metrics and information to provide the directors ahead of time, so they are engaged and invested in the success of the business. Do not let them sit through meetings without providing you meaningful feedback. Do not fill meetings with reports about the past.
First, look at all of your board meetings for the year as a whole. Think through the year ahead of time and come up with a purpose for each meeting. Each meeting should have a purpose related to your financial calendar (e.g. capital planning, budget planning, cash flow planning, etc.). Each meeting should also have a purpose related to your business improvement calendar (e.g. leadership team evaluation, customer strategy development, etc.). Do you need help with some customer strategies? Do you need help addressing some cost issues? Do you need help addressing some internal culture issues? Do you need your leadership team to hear your message, but from a different voice?
With a clear meeting goal in mind you can prepare the agenda and the prep work accordingly. Many board meetings devote a lot of time to reviewing past performance. The board sits around the table and listens to you or some of the executive team members go over the metrics from the prior period and offer explanations for the good, the bad, and the ugly. The board may offer some feedback at the end, or chime in with some comments along the way, but the bulk of the meeting gets eaten up by the past performance review.
There are better ways to utilize your board.
- Work with your board to figure out the most useful information for them and how to get it to them. Put the key metrics, financials, and narrative into a digestible format. Get that information to them ahead of time in order to cut down the performance review portion of the meeting substantially and open up time for meaningful discussion.
- Think about the questions you want answered in order to accomplish your meeting goals. Do your prep work and get your prep work and those questions to the board ahead of time so they can provide thoughtful feedback during the meeting.
- Prioritize your goals as you develop the meeting agenda. If one of your meeting goals is to expose a new leadership team member to the board, make time on the agenda for the board to meet the new team member. If one of your meeting goals is to discuss succession planning, limit distracting or time-consuming agenda items so the board can devote its energy to the succession planning discussion.
Talk to directors ahead of meetings, and regularly in between meetings to keep them up to speed and to make sure they are engaged and invested in your business. Plan and set goals for your time with your board. This planning and prep work turns your board meetings into true working meetings that will help your business rather than a parade of powerpoint slides about the past.
Bonus Board Value: You don’t have to go it alone
It is not the first value you may think of when you think about your board of directors, but a board can provide you cover. Do not underestimate the ability of a good board of directors to support you and your initiatives. Perhaps you believe the business needs to make some serious and internally controversial decisions. The decisions will result in winners and losers among other leaders and shareholders in your business. Remember legally, the board of directors is charged with setting the strategic vision of the business and managing the business. The board can, and should, own the difficult decisions. You do not have to make the decisions on an island. You can share the responsibility with a quality board of directors.
Running your business is hard. Make it easier on yourself by getting more help out of your board of directors. Put together a strong board of directors to support you and your business and utilize it. Provide meaningful, easy-to-digest business information to your directors on a regular basis so you can get the most out of your board meetings. Take advantage of your board’s insights, connections, assessments, and intelligence to turn your board into a strong asset that adds value to your business. That value-adding asset can set you up for success and ease your burdens.