This post is for entrepreneurs as part of a series of observations and tips on building an effective board. This is Part 4.
There are many different ways to run a board meeting, and it’s important to choose a style and approach that works best for you.
To start, it’s important to talk to other CEOs to learn what has worked best for them. It may also be useful for you to consult with the other directors on your board to understand their preferences. Bear in mind that the frequency and structure of your board meetings will need to evolve as the business grows and becomes more complicated, more formal, and harder to manage.
Here are a few important suggestions that will serve as a useful guide:
Don’t let the inmates run the prison
As long as you are the CEO, you have both the responsibility and the authority to run the company. Use them wisely. Understand that your directors will counsel you—and perhaps strongly disagree with you—but ultimately can’t make decisions for you. As the leader, you must fight hard for what you believe in. For example, there have been many times when we’ve offered different points of view to a CEO and ultimately accepted and supported his decision. Rarely have we experienced a split vote on the board or a situation in which a CEO has been outvoted.
Corporation vs. kingdom
Chances are you have a deeply personal investment in your company and have sacrificed a lot to get here, so you would like to maintain as much autonomy as you can for as long as possible. There are many examples of highly successful founders (e.g., Jeff Bezos, Larry Ellison, Mark Zuckerberg) who have effectively maintained leadership positions in their companies from inception all the way to running a public company.
For first-time founders and CEOs, it is often very difficult to make the adjustment from sole decision maker to being held to account by your board. Remember and observe the fiduciary obligations you have to your stakeholders outlined in the first post of this series, and always keep in mind the company is bigger than any one person, including you.
Keep it simple
Preparing for board meetings will help you step back from the day-to-day grind of operations to think critically about where you are and where you need to go. Avoid the temptation to cover everything in one meeting, as a well-prepared board package will provide your board all the information it needs without you having to cover it all. Instead, pick one or two key topics and plan to devote most of the meeting to discussing them.
Keep it short
Most investor directors have developed the skills necessary to quickly process and distill the key points from large amounts of information, so it’s feasible to keep the meeting no longer than two or three hours.
Keep it sharp and to the point. A high-intensity and focused exchange of ideas is far more valuable than a low-tempo, meandering discussion. Let the discussion flow, but be prepared to snap it back to the agenda if it wanders too far off track. Clear the formal board business first, and be prepared to take important (but not immediately vital) discussions offline. Occasionally, an event or discussion point will hijack your agenda, and you will need to scrap the agenda and run the meeting on the fly. This rarely happens.
Solo artist vs. front man for the band?
Some CEOs play it close to the vest and tightly control the directors’ access to management, whereas others encourage direct relationships between directors and key members of the team. Either approach can work, but we prefer to get to know the team inside and outside of board meetings; this gives us a better feel for the company and the people managing it. In many cases we may have a prior relationship with an employee or may have been very involved in recruiting him to the company.
Whichever style you choose, it is vital that all parties respect the chain of command and avoid undermining your authority as CEO.
Use your corporate attorney
It’s a good idea to ask your corporate attorney to attend all board meetings to take notes and prepare the minutes. Most good law firms will do this at little to no cost because it actually makes their job easier. Keeping accurate and up-to-date records is a good habit and will pay dividends down the road when you sell the company or take it public. On many occasions I’ve seen poor record keeping slow down or jeopardize the sale of a company, and buyers will use it as a way to chip away at price.
The job of a founder and CEO is a lonely one and full of self-doubt at times, but understanding your responsibilities as a director, structuring and building a great board, and learning how to run a productive meeting will build value for your company and make for a fun and rewarding journey.