I am a fan of having a formal board meeting right after the company raises seed financing.
I have seen how helpful the boards are and how lost and disadvantaged the founders can often be without the board. To put it simply, a good early-stage board helps the CEO identify key future milestones, and helps achieve them.
For 99 percent of early-stage startups, profitability is not possible, so the company needs to raise another round of financing. To get this follow-on capital the company needs to achieve key milestones, and prove its hypothesis around product/market fit, revenue, customers, users and growth.
A good board helps the CEO by focusing on achieving these milestones. However, in order for the board to be helpful, the CEO needs to run an effective board meeting.
How Not to Run Your Board Meeting
Before we dive into how to better structure board meetings, let’s discuss what not to do.
Spending the entire meeting giving the board an update and going through the slides is not a great use of the board’s time.
Why? Because this leads to focusing on details, nit picking and loss of the big picture.
Going through the updates slide-by-slide makes board members not review materials in advance and not think through their questions. This format leaves no time for strategic conversations, and does not leverage the strength and experience of each board member.
The format feels adversarial and creates an odd dynamic because questions keep coming and the CEO is seemingly constantly on the defense. In short, this format is ineffective.
How to Run Your Board Meeting
A better format shifts the focus of the meeting from reviewing slides to a strategy discussion around just a handful of key topics. In addition, effective board meetings have clear structure and follow an agenda, allowing the CEO to keep everyone on track and actually accomplish things. Here is a sample agenda of a typical 2-hour board meeting:
1. Circulate materials and agenda 3 days in advance
2. Materials review: 15 mins
3. Q&A on the deck: 15 mins
4. Strategic topic 1: 30 mins
5. Strategic topic 2: 30 mins
6. Budget deviations review: 10 mins
7. HR / open hires: 10 mins
8. Board minutes / wrap-up and next steps: 10 mins
Send the materials in advance and also give the board 15 minutes to review the materials in the meeting. This is the strategy that Jeff Bezos uses in his executive meetings. Start the meeting by reviewing the materials. This budgets the review time into the meeting and gets everyone on the same page.
Have people ask clarifying questions about the materials. Keep the answers and discussion short. Most questions will likely be focused on KPIs and financials. You will have more time to address financials toward the end of the meeting. Table longer questions for later, and follow up as necessary.
The next 2 segments are the most important ones — key strategic topics that you as a CEO need help with. You have an open forum to engage the board and lean on their experience. Questions can range from go-to-market strategy, to sales, to competition, to next financing, to company culture and hiring. Whatever it is, the topic is part of the agenda and the CEO engages the board deeply around it. This sort of focused discussion feels productive, helpful to the CEO and satisfying to board members.
Next, briefly review financials. Frame the review in terms of deviations / what is not on track. Do not make the review too open ended, or it is going to take too long. Remind the board of what projections were and how you are doing against your projections. Explain why you are behind or ahead of the plan, particularly around the burn. Ask for feedback and create follow up as necessary.
Next, talk about open hires. Every company, no matter how early, is always focused on hires — whether it is engineers or marketing folks or any other role, it is important to create ongoing dialog with the board about hiring. Boards can be helpful, particularly when it comes to more senior hires, because the directors have experience and large networks that CEOs can tap into.
Wrap up the meeting with a quick summary of takeaways and next steps. Make it clear who owns what items.
This structure should generally work for every company, but we encourage you to tweak it to make sense for your company.
For example, if you feel like you are not getting enough time on finance or HR, you can make them strategic topics. In any case, do not discuss too many topics per meeting as it will make the board unfocused, and the board members will not be able to help.
Part of the art of being the CEO is to pick the right focus for each board meeting. Try a structure like this for your board meeting, get feedback from the board on what is working and what does not and keep iterating until you get to a format that works for you and feels productive and helpful.
Image credit: CC by Montgomery County Planning Commission