In my new book, Startup Boards: Getting the Most Out of Your Board of Directors, in addition to decomposing and explaining a lot about the functioning of board meetings, I also describe my ideal board meeting.
I had four of them this week. That’s a lot of board meetings in a week, but my weeks tend to either be “lots of board meetings” or “no board meetings” as I generally bunch them up. Thankfully, all four of them used my ideal board meeting template.
A critical aspect of my ideal board meeting is that the entire board package should be sent out several days in advance to all board members. It should be thorough, including whatever the CEO wants the board to know about what has happened since the last board meeting. While I prefer prose to a PowerPoint deck, either is fine. Optimally it’s in a format like Google Docs where everyone on the board can comment on specific things, allowing open Q&A on the board material prior to the board meeting. I like to decouple monthly financial reporting from the board package, but including a look back of the financials, along with discussion and framing is useful. But the meat of the board package should be what’s going on now and going forward, not looking back. The looking back is for support of the discussion.
Then – the board meeting has a simple structure intended to fit in three hours. Optimally all participants are either in person or on video conference. Since I’m not traveling for business right now, almost all of my board meetings have a video conferencing component. When done correctly, it’s often just as effective as an in-person meeting, and in some cases (if you follow my video conferencing rules) even more effective. What is not effective is when one or more people are on an audio conference.
Once everyone is settled, break the board meeting into three discrete sections. They, and their descriptions, follow:
Administration (30 minutes): Board overhead, resolutions, administration, and questions about the board package.
Discussion (up to 2 hours): Discussion on up to five topics. The five topics should fit on one slide or be written on the white board. The CEO is responsible for time boxing the discussion, or if he needs help, he should ask the lead director to do this. If you don’t have a lead director, read my book and get yourself one. This should be a discussion – you’ve got your board in the room – use it to help you go deeper on the specific topic you are trying to figure out. These topics can be on anything, but my experience is that the more precise the context is, the richer the discussion. I prefer for the full leadership team to be in the meeting for this part, although it’s entirely up to the CEO who is in the room.
Executive Session (30 minutes): CEO and board only. Here the board can give feedback specifically to the CEO or sensitive issues around personnel or other things the CEO wants to discuss separately from the management team can be covered. At the end, the CEO leaves and let’s the board have some time alone where the lead director checks in if there is any feedback the board would like to give the CEO.
If you have less than five topics, the board meeting can take less time. Or if the five topics only take an hour to go through, the board meeting can take less time. There is nothing ever wrong with ending a meeting early. Ever.
Now this template doesn’t always work – you often have other specific things you have to address. When a company is going through an M&A process, the board meetings tend to be frequent and cover other stuff. Or, when the company is in a downward spiral, or dealing with a crisis, the focus is often very precise.
But in my world, the day of the “board update” is over. I find no value in sitting in a room for three hours, paging through a PowerPoint deck while people present at me, and the people around the table ask an endless stream of questions, mostly demonstrating that they haven’t been engaged in what the company has been doing since the last board meeting.
I go to a lot of board meetings. As a result, I’ve reviewed a lot of board meeting minutes. In general, the philosophy among most VC-backed companies – promulgated by the law firms for these companies – is to keep the board minutes “light.” They should cover the substance of the meeting and have any specific votes, option grants, or board level issues documented, but they should not contain extensive details about the presentations giving in the board meeting.
I regularly get asked for “sample board meeting minutes”, especially among newly funded companies that are just starting to have board meetings and might not have their outside counsel present at the meeting (although most outside counsel’s that are credible and used to working with early stage companies will attend board meetings at no charge – just ask as part of your initial interview process with the firm – it’s very useful to them to be there so they can stay up to speed on what is happening at the company.) Following is a template for a sample set of board meeting minutes.
[INSERT NAME OF COMPANY]
MINUTES OF A MEETING OF THE BOARD OF DIRECTORS
[Insert Date of Board Meeting]
A meeting of the Board of Directors (the “Board”) of [Insert name of company], a [Insert state of incorporation] corporation (the “Company”), was held on [Insert date of board meeting] ([Insert time zone—i.e. Mountain Daylight Time]) at the offices of the Company.
[Insert names of directors present]
Also Present Were:
[Insert names of other people (mgmt., etc.) present]
[Insert names of directors absent]
[Insert names of legal counsel present]
NOTE: It’s generally good to note next to the above listing if the attendee(s) participated via telephone (otherwise it’s assumed they participated in person at the above referenced location]
Call to Order
[Insert name of CEO or board chair] called the meeting to order at [Insert start time of meeting] ([Insert time zone—i.e. Mountain Daylight Time]) and [Insert name of secretary] recorded the minutes. A quorum of directors was present, and the meeting, having been duly convened, was ready to proceed with business.
[Insert name of CEO] reviewed the agenda and welcomed everyone to the meeting. Next, [Insert name of CEO] discussed the current status of the company and its progress. A number of questions were asked and extensive discussion ensued.
Sales & Business Development Update
[Insert name] next provided an update on the overall sales progress and sales pipeline of the Company. He also presented the status of business development discussions.
* [Insert name] joined the meeting*
[Insert name] provided a comprehensive update on the Company’s financial plan and forecast. [Insert name] also reviewed the Company’s principal financial operating metrics. Discussion ensued.
The Board next discussed the timing and creation of the 2007 Operating Plan.
Approval of Option Grants
[Insert name] presented to the Board a list of proposed options to be granted to Company employees [and advisors], for approval, whereupon motion duly made, seconded and unanimously adopted, the option grants were approved as presented in Exhibit A.
Approval of Minutes
[Insert name] presented to the Board the minutes of the [insert date of previous board meeting] meeting of the Board for approval, whereupon motion duly made, seconded and unanimously adopted, the minutes were approved as presented.
*Management was excused from the meeting *
The Board next discussed a number of strategic topics. Questions were asked and answered.
There being no further business to come before the meeting, the meeting was adjourned at [Insert time of adjournment] ([Insert time zone—i.e. Mountain Daylight Time]).
[Insert name of secretary], Recording Secretary
NOTE: Create (and delete) additional headings and sections above as necessary to capture the major agenda items of the board meeting.
NOTE: If attendees join after the meeting start time or leave before the meeting adjournment, it’s preferable to note when they join and leave the meeting as indicated above by the asterisked notations.
Do you remember your first board meeting? I do. Well, I sort of do, kind of, maybe.
Danielle Morrill of Mattermark memorialized her first board meeting on the web in her post Post Series A Life: Reflecting on Our First Board Meeting and What It’s Like Working with Brad. It’s a detailed view of her expectations leading up to the first board meeting we had along with the blow by blow from her perspective of the board meeting.
I have two simple pieces of feedback to Danielle, Kevin, and Andy about the board meeting. First, bring the rest of the leadership team the next time so we have a room full of the team for most of the meeting. Second, you did great – I love the style of board meeting we had.
We didn’t have board meetings at Feld Technologies – we didn’t really have a board. There were three owners – me, Dave Jilk, and my dad. Dave and I had a monthly offsite where we went away for a day and an overnight somewhere within driving distance of Boston. We did this eight to ten times a year and these were some of the most powerful and useful working days, and personal days, we had together. Once a year my dad would join us for a long weekend somewhere where we hung out, talked about the business, and drove around New England.
My first real board meeting was at NetGenesis. I remember the place – an MIT classroom. I remember the attendees – Rajat Bhargava, Eric Richard, Matt Cutler, Matthew Gray, and Will Herman. The chalkboard was black, the chalk was white and dusty. Will and I had each invested $25,000 for a total of 20% of the company. It was 1994. The meeting was around a wooden MIT classroom table that looked like it was from 1894. I don’t remember much of the meeting, except we wrote lots of lots of things on the chalkboard. There were no PowerPoint slides.
I remember my first board meeting for a company I joined as an outside board member. This company was SBT Accounting Systems, based in San Rafael, California. I flew to San Francisco from Boston, stayed overnight in the city, and drove over the Golden Gate Bridge. I’d only been to San Rafael once before, presumably to interview for the board position under the auspices of spending the day at the company. I was nervous because I had no idea what to expect. I showed up a little early, was ushered into the very large board room, and fed breakfast of bagels, pastries, fruit, and coffee. For some reason, I remember eating so much that I was full before the meeting started. SBT always had outstanding, freshly ground coffee filtered through Melitta cone filters which meant that I often drank way too much coffee. Unlike my NetGenesis board meetings, and the few others that I had started attending like ThinkFish’s, this one was formal. Everyone took their place at the table, with blue board books in front of them, and “the show” began. After a number of years of faithful service, I left that board, but I learned a lot and remember the time on that board as helpful to forming my view of an ideal board meeting.
My book, Startup Boards: Getting the Most Out of Your Board of Directors, covers what I’ve learned over the ensuing hundreds of first board meetings, and thousands of board meetings, I’ve participated in. While the book was hard to write, and at some points I feared that it would be excruciatingly “boring” to read, the feedback has been positive, especially from entrepreneurs and CEOs like Danielle who are having their first “real board meeting.”
Just remember – keep it real, not fake. Be yourself. And own the meeting.
I’ve been to a gazillion board meetings. I’ve written a lot about them including a book called Startup Boards: Getting The Most Out of Your Board of Directors and piles of board meetings posts on this blog. I still do a lot of them, but I’ve definitely been on a quest the past few years to (a) figure out what works best and (b) try to organize my world around more effective board meetings based on what I’ve learned.
On Friday, I had a Mattermark board meeting. It was our second one since we invested in Q414. Danielle Morrill wrote a post in February about our first board meeting. It was a long board meeting as I’d reserved from 11am until the end of the day for it, followed by dinner together, but it was very different than the one we just had as we search for our rhythm as a board.
At the first board meeting, Danielle, Kevin, and Andy came to Boulder and spent a few days here together. In addition to the board meeting, they spent a bunch of time with founders in other Boulder-based portfolio companies of ours.
This time the Mattermark leadership team, including Sarah, BT, and Beau came to Colorado. They arrived Thursday night and drove up to my house in Keystone (about 90 minutes away). I got up early Friday morning and drove up there, getting there around 10:00am. The Mattermark gang was up, had just finished breakfast, and were doing what lots of startups do when they are hanging out waiting for an investor to show up (queue photo of people sitting around on their laptops.)
We got a little more coffee and then went downstairs into our big, comfy TV room. Last time, we worked directly in a Google Doc. This time, Danielle made a deck summarizing everything we’d been doing back and forth in via the Google Doc over the past week leading up to the board meeting. The deck looked good on our 75″ TV and we fired up Skype on a laptop at the front of the room for Lisa (who couldn’t come) and Megan (our outside counsel.)
We proceeded to spend until almost 8pm going very deep on various aspects of the business, product, product strategy, organizational dynamics, and goals for Q215. During this time, we took 90 minutes off for lunch and had a bunch of Mexican food at Fiesta Jalisco. At about 7pm we shifted into an executive session of just founders and board and then Danielle and I spent 30 minutes just doing a 1:1.
We then jumped into cars and went out to a late dinner. My favorite Sushi place Kemosabe Sushi had an hour wait so we went to Silverheels Bar and Grill next door. We were done talking business so we talked science fiction, crazy obsessive habits, fun ways everyone had met each other, and the stuff you talk about after a long day together.
They then drove back to my Keystone house to spend the rest of the weekend together. I drove home because I really wanted a weekend with Amy just hanging around and chilling out (she’s taking a nap as I write this.)
Overall, I’ve tried to shift my board meeting rhythm to once a quarter. My favorite board meetings are the ones that including the entire management team. I like to have a meal with the entire management team as part of the board meeting. I like to have social time and give the team time and space to get to know me better, and themselves better, outside the normal pressure of the day to day grind that is startup life.
I’m a very deep believer in continuous engagement with companies I’m an investor in. As a result, I do not like a monthly board meeting rhythm. I think it’s too much overhead on a leadership team and lets investor / board members off the hook for continuous engagement. More specifically, I know many investors who only really engage with companies either around the board meeting, when a transaction is going on, or when there is a crisis. While this might be useful for some people, it’s not my style nor how I like to engage.
I’ve only had a few of these “full-day retreat at my house in Keystone followed by management taking over the house” type board meetings and I really like them. I expect I’ll do more in the future and encourage any of the companies I’m on the board of to take me up on them.
I had a board update call recently that inspired me to write the first of my Reinventing the Board Meeting posts.
The call was for a company that is doing great, is extremely well managed, and extraordinarily transparent. Two days before the call a very detailed update package was sent around to the board. It covered the operating characteristics of the business extensively and in a format that is consistent with all of the other reports. It was clear and unambiguous.
The company does a very nice job with the board update call. They don’t force the board to sit through a page by page discussion of the package. Instead, there’s a short overview for each section followed by any Q&A that board members have. This is a pretty good approach. After about an hour of this we spent another 30 minutes on a handful of governance and board related issues. Overall, the call lasted two hours.
When I reflect on the call, we didn’t cover any strategic issues, nor did we discuss anything that would materially impact the company. In addition, there was nothing discussed that couldn’t be handled in email back and forth or flagged for a deeper discussion at the next board meeting.
This board meeting update call is an artifact and is typical of the many board update calls I’ve been doing since I joined my first board (other than my own company) in 1994. I don’t even want to think of the number of hours of my life (which is probably cumulatively measured in years at this point) hanging on the end of the phone trying to stay intellectually engaged in a board update call.
I’ve come to believe that the board update call is worthless. There tend to be three parts – all which are easily separable:
- Business Update: At the minimum, this can be a monthly report that goes out to the full board. Assuming that all of the board members can read and are capable of writing an email, any questions can be surfaced via email. The best companies I’m involved in actually do this weekly and, if you follow Steve Blank’s “Boardroom as Bits” hypothesis, you can turn this into real time info where the board is incorporated into the information stream of the company.
- Business / Strategy Issues: For whatever reason, the vast majority of board update calls don’t have a deep discussion on any substantive issues. They are often flagged along with a shallow conversation but then deferred either to the next in person board meeting, left for interactions between individual board members and the CEO, or dropped on the floor and quickly forgotten.
- Legal / Governance Issues: Inevitably there are minutes to approve, options to approve, and other legal / governance issues to deal with. These almost always can be handled at the next in-person board meeting or by a UWC (“unanimous written consent” sent around by email.)
There were a dozen people on the call I was on including management team members. That’s a full person day of time spent on something that didn’t need to happen. Expensive.
CEO’s – reconsider how you are doing this. And to my fellow board members – challenge the CEOs and the boards you are on to engage in a more effective, continuous way. And to the CEO for every board I’m on – I’m happy to work with you to abolish the board meeting update call if you’d like.
My amazing day at the Supreme Court continued to bounce around in the back of my mind all day yesterday. I was at a board meeting for a company that I’ve been on the board of for almost a decade – it was the best (as in most productive) board meeting we’ve had in a long time.
I’ve written about The Best Board Meetings in the past. One element of the best board meetings is a prepared mind. This is the powerful lesson from the Supreme Court. On Monday (at the Supreme Court), I saw eleven very smart people participate in a very complex discussion that they were extremely prepared for. In one hour they covered an amazing amount of ground. I attribute this to the work they did in advance of the meeting.
In many board meetings, the material shows up at the meeting, or the board members haven’t read the material in advance, or the board material is not very detailed, or the board material is too detailed. Basically, either the board members don’t have the material to have a prepared mind in advance of the meeting, or they don’t take the time to do the work to be prepared.
Then, unlike the Supreme Court session where you can dive into substance immediately, the board members and management spend a long portion of the meeting “getting up to speed”. That’s a total waste of time for everyone in the room.
In my strong board meeting yesterday, everyone was prepared. The board material was comprehensive, but not overly so. It came in advance of the meeting (only 24 hours, but still enough time for everyone to read it). And, rather than go through the material page by page, we picked a handful of key themes and discussed them. For several hours. In detail, but at a level that resulted in clarity for the board members and management.
The other key lesson from the Supreme Court is paying attention. I’ve written about this also in VC Behavior in Board Meetings. I continue to fall victim to the blackberry checking syndrome. In the Supreme Court, phones, computers, and PDA’s weren’t allow. So I paid attention. And as a result I really followed what was going on and processed almost all of the information. Even in yesterday’s board meeting I found myself drifting a little and pulling out my iPhone – bad Brad. It detracted a little from the meeting (my fault), but most importantly it caused me to likely miss a few things I shouldn’t have missed.
I’m at Defrag all day today and am going to try to pay attention.
I hate board meetings. I probably have 100 per year which means I’ve gone to well over 1,500 of the past 15 years (I’m sure the number is much higher). The vast majority are excruciatingly inefficient – three to four hours that could be handled in 45 minutes. And even then, it’s unclear that the information covered was particularly useful to the entrepreneurs and management, who are the ones the board meetings should be useful for in the first place. And they don’t merely waste three hours – they burn a day in advance “getting ready” and who knows how much time after following up on random things generated by me and my fellow board members. Toss in travel (since we invest all over the country, I lose a lot of time to traveling) and it just sucks.
Recently, Steve Blank, one of the founders of the Lean Startup concept, wrote two provocative posts about board meetings. Both are really good – go read them – I’ll wait:
Now, I’m lucky. I’ve been railing about board meetings for a while and a number of CEOs of the companies that I’m an investor in have dramatically upped their game around board meetings. I have a handful of single slide board meetings inspired by the early board meetings we had at Zynga. Almost all send out their materials in advance and spend no time in the actual meeting going through them and instead focus on the discussion. And others simply focus the meeting on a handful of specific questions.
Regardless, when I reflect on the amount of my time that I spend in board meetings that I think is generally worthless, I’ve decided I’m going to completely change how I approach this. The tempo is all wrong (I don’t need monthly board meetings for anything as I spend much more real time interacting with the entrepreneurs I’ve invested in). The focus is all wrong (I can read the financials in a few minutes – I don’t need to sit through an extended discussion of them). The discussion context is inefficient (I’m as much a problem as a victim here as I’m sure my other board members get tired of listening to me bloviate.)
It’s time to reinvent the private company board meeting. I’m going to give it a shot.
Seth and I have each attended over 27,367 board meetings. Ok, I don’t know the actual number, but it’s a lot. We’ve both been on good boards and bad boards. Boards that have helped companies and boards that have sunk companies. Boards that know how to resolve conflict and boards that have multiple passive-aggressive actors engaged in a complex dance that serves no one, especially the company.
So, I’m totally digging Seth’s new series. Not surprisingly, since Seth and I have been working together for over 17 years, there’s a lot that is the same as my board approach. But, I’m also learning something from each post which I plan to incorporate into my board world going forward.
The first four posts are up. In order:
- Designing the Ideal Board Meeting
- Designing the Ideal Board Meeting – Before the Meeting
- Designing the Ideal Board Meeting – Your Board Package
- Designing the Ideal Board Meeting – The Board Meeting
If you are a founder, CEO, investor, or outside director who is on a private company board, this is a must-read series. And, if you want to go deeper on how boards work, grab a copy of the book I wrote a few years with Mahendra Ramsinghani ago titled Startup Boards: Getting the Most Out of Your Board of Directors.
At the end of every board meeting I’m a part of we have a closed session. This is a session that includes only the board members. All of the boards I’m on include the CEO as a board member so the CEO is part of the closed session. If there are multiple founder / management board members, they attend. But – no observers and no members of management that aren’t on the board.
I was on a board call yesterday that was confusing. The company is doing well, the management team is very solid and stable, and the board packages are comprehensive and transparent. I’ve worked with the CEO for a long time and we rarely have any misunderstandings (we have plenty of disagreements, but we know how to talk through them.) The company is mature enough that we’ve shifted into an eight per year board meeting tempo; two meetings a quarter – one in person that is usually deeper and strategic; one by phone that is an update call.
When I got back from vacation on Wednesday, I read the board package. No surprises. There are no strategic activities going on for the company (no fundraising, no M&A, nothing "fancy") – just strong and steady execution. The tempo of the call started off a little odd – the CEO brought up some forward looking concerns of his. While he was describing them, I was having a hard time connecting what he was saying to the board package I had just read. As we went through the management team review of the business, I got even more confused as many of the tactical things we had discussed at the previous meeting had been done well and everyone sounded upbeat, although appropriately cautious. The CEO highlighted a few more concerns of his and then asked an open ended question – something like "what do you guys think?"
We were all on the phone so it was hard to read any nuance. I expressed my confusion. I asked a few clarifying questions. My confusion increased. Maybe it was jetlag, but my brain was just not connecting the dots. At some point the CEO took us in a different direction to try to address another issue that he was potentially concerned about. While the issue he raised had some short term issues, he had extrapolated it as a long term trend. I didn’t agree that it made sense to extrapolate the trend from one data point, made some suggestions, but felt the awkwardness increasing.
We ended the meeting and went into closed session. We all took a deep breath. I told the CEO I was confused. He was confused. The other board members on the phone were confused. If we had a giant time machine we would have gone back 60 minutes and started over. Instead, we had a great ten minute conversation where we realized that we were just talking past each other. We hit the giant mental reset button and in a few more minutes had recalibrated.
Even though we usually end after the closed session, this time we decided to bring the management team back in to clarify things. We realized that when we ended the meeting, we had a leadership team that was likely as confused by the meeting as we were. I imagine there was sixty seconds of discomfort while everyone gathered where they were wondering what was going to happen next. We had a short reset of the discussion, clarification of what the CEO was really trying to communicate, and reaffirmation that we were on the right track, even though this was a weird and confusing meeting.
I talked to the CEO today just to check in. We had a good call and we both reaffirmed that all was cool. He said he’d learned something important – that if he was just going to "think out loud" during a board meeting that he should preface this with a statement indicating this. I agreed that this was the right conclusion – that I’d much rather he "think out loud" vs. feel compelled to figure it out all. I also suggested to him that if he thought I was lost in space, he should just hit me over the head with a brick.
I’m really glad we had the institution of the closed session firmly in place for this board. It gave us room to figure out what was going on, where the miscommunication was, and reset the discussion. Without it I expect everyone would have scattered to go back to work with their confusion firmly intact.
I find three hour “reporting board meetings” where everyone sits around and goes through a 50 page PowerPoint deck to be tedious. When I first started investing in 1994, this was the norm. I put up with it even though it wasn’t my style because (a) I didn’t know better and (b) I didn’t have any better ideas.
27,351 board meetings later, I know there is a better way. I’ve encouraged everyone I work with to try different approaches. I’ve written about some of my favorites in the past, such as doing an entire board meeting off of one slide with a list of “top of mind” items that the CEO has (this assumes that all the board material – appropriate data about the business, financials, and any department updates, have been previously circulated and consumed by all board members.)
Another one of my favorites is to start a board meeting off with a demo. Today, we had the Orbotix board meeting at our office. We spend the first 15 minutes playing with Sphero, the robotic ball that is Orbotix first product (and available for pre-order now.) We then spent the rest of the board meeting talking about the key issues. Paul Berberian, the CEO, had an agenda which we generally covered, but we were able to have real discussions about real things, rather than just a bunch of “arm crossed people starting at a PowerPoint presentation on the wall.”
This stood out in contrast to another board meeting I had later in the day. I attended this one by phone. It was for a company that is doing superbly, but was a very old school style meeting. 54 slides later the meeting ended. There was plenty of information covered and the management team presented everything really well (as usual – it’s a gang that has their act together), but there were only a few parts of the meeting where we had space jams (think of the Grateful Dead on a 25 minute riff that is the best part of the concert.)
Yup – there are plenty of different ways to skin a cat. Or play with a robotic smart ball. If you are a CEO, don’t be afraid to try different things. And, if you want to see who the real fan of a robotic smart ball is, take a look at the video below (and if you like it, vote it up on LOLDogs.)