How can I make my Board more effective?

Respect the formal role

Startup founders have a natural allergy against anything that sounds too corporate. Many CEOs therefore try to make their board something informal, like a club of friends. While there can be a place for this (see below), it is important to realize and respect that the Board has a formal role to fulfill, often prescribed by law.

Formal decisions that a Board must/should take in many jurisdictions include:

• Approval of the budget for the year
• Approval of appointment, compensation and dismissal of Officers
• Approval of the strategy

At the very least, ensure that the formal decisions the Board is meant to take are:

• put forward in a formal part of the agenda
• announced up front in the Board documentation
• formally requested from the Board members during the meeting
• noted down in the minutes.

A formal decision does not need to be a vote, by the way. Most board decisions are taken by acclamation, as in “Does everyone agree? Can we confirm this?”. If nobody protests, then the Board is deemed to have approved the resolution. Most Boards and other groups prefer this acclamation system to avoid unnecessary conflict.

If you have a head of legal or a company lawyer, they often do a superb job facilitating the formal part.

But treat like an equal

However, respecting the formal supervisory role of the board should not lead to feelings of a boss-subordinate relationship (or parent-child relationship, in psychological terms), e.g.:

• Do not optimize for “selling” to the board. We have seen many companies where executive teams over-optimize for superb design of slides, for story telling, almost for pitching to the board. While this may work short term, it can easily come back to bite you after 2-3 board meetings when board members start seeing in the data that you’re not delivering on your pitch.
• Do share relevant data with the board, but do not send so much that you expect board members to prioritize which data to look at and how to make sense of the data. They are not your boss in the sense that they can do the work for you. What matters most is that you as the CEO/the leadership team can make sense of the data and that you haven’t got a huge blind spot.
• Do not overwhelm the board with data and slides in an attempt to make them feel impressed about all the work you put in.
• Do not ask the board to take a decision that you have not (carefully) prepared for them. Just coming with a problem without a possible solution is the best way for a board to lose confidence in their executives and not to see them as an equal.

The best boards work on an adult-to-adult basis, realizing that people have different roles to play, but all openly sharing the information and questions they have, so that the company can benefit from creative agreement:

• In your deck, prepare your key messages for the board but keep it “dry”. Underpin the key message with only the relevant data.
• Provide standard data that the board wants to see every time (eg budget, income statement, lists of open hires) in appendix
• Separate out the formal decision-making parts from the more creative “workshop” parts.

No surprises in the meeting

One key aspect of all treating each other like adults is that you don’t want to surprise the board in the board meeting. EVER. The first reason is that when people feel surprised, it will typically have a negative effect on their trust in the executive(s). The second reason is that it may also lead to surprising and spontaneous decisions from the board, decisions you have not prepared for and that therefore, almost by definition, are difficult to prioritize and/or to implement.

To avoid surprises, best practices are:

• To have a standard agenda that you use for every board meeting.
• To have a draft deck ready 2-3 weeks before the board meeting
• To have a quick 1-1 meeting with every board member, taking them through the draft of the deck, and updating the deck with any concern they might have
• To list key decisions to be taken explicitly in the deck
• To send out the deck one week before the actual board meeting
• To follow the agenda and the decisions to be taken, to the letter if possible

Have 1-1 conversations upfront

One way to ensure that there are few to no suprises in the meeting, is to have a 1-1 conversation with each board member upfront. The goal is:

1. to review the (early draft) board deck
2. catch and incorporate any key questions or suggestions the board member might have
3. build more trust with each other

The best time to have these 1-1 conversations is between 3 weeks and 1 week before the board meeting, ie between when the draft of the deck is ready and when you’ll formally send out the draft to all board members in advance of the actual meeting.

Set the stage for the formal decisions

Most startups do this wrong, but we believe it’s beneficial to formally set the stage for actual decisions the board needs to take.

The easiest way to do this, is by preparing one slide that has all the decisions listed, with a clear approved (yes/no) checkbox.

Then on the agenda you can refer back to that slide every time a decision comes up, and in the minutes you can note down what the board approved or if they approved it only subject to a change being made.

Let your management team prepare and present

Many startup CEOs make a mistake in keeping their management team away from the board. Perhaps only two co founders (eg CEO and CTO) and investors are on the Board, and they want to keep the meetings small.

Our suggestion is definitely to keep the number of Board members (and Board observers) small. But for presenting the key business results, it is better to let the responsible executive present rather than the CEO presenting on their behalf.

This is a question of simple group dynamics. For example, when the CRO (who is not a Board member) is asked to present the sales results and pipeline and the CEO is part of the audience, it is easier for board members to provide advice to the CEO on a peer-to-peer level. They could give some constructive feedback to the CRO and then in the private session (when the CRO has left the room), they could have more solid feedback on what the CRO is doing well, where they fell a bit short and how the CEO could offer better coaching.

Not letting the CEO present too much will also prevent them from going into “full sales mode”, where they would tend to shield information and be less open to constructive feedback.

Of course, this is no excuse for the CEO to just let other executives run into a wall. The board will still hold the CEO responsible for the quality of the presentations and the business results. But even if the feedback is mostly negative, it is still better for executives to hear that first hand than having the CEO tell them afterwards how bad it was.

But only take guidance yourself

Building on what we wrote before, the real guidance from the Board should be in a “private session” at the end of the meeting, with all executives (and usually all observers) leaving the room so that a much smaller group can give each other more solid/honest feedback.

This kind of guidance is different from the quick feedback and Q\&A at the end of the presentation, that each executive should indeed hear for themselves. The private session guidance is more of an overall feedback session, not talking about specific presentations too much but more about “the state of the business” and which actions/fixes should be prioritized over others.

This guidance is sometimes tough and can take a while for founders/CEOs to digest. It also takes a specific decision on each of the point of advice: whether to follow the advice or not. Remember that the Board will also still hold you responsible for results, not for jumping through hoops to do whatever they asked you to do.

If you truly think that some Board advice will not help to provide better results, it is better to decide against it, and to let the Board member in question know how seriously you have considered it and why, ultimately, you had to reject it.

Don’t let Board members become CEOs

Write up paragraph here

Avoid sales pitch habits

Write up paragraph here

Provide clean high-level data

Write up paragraph here

Additional input

Our Q1 board meeting was yesterday.

It was my 33rd board meeting as CEO of Broadlume

Coming from Google I had never run a board meeting before.

I kept notes for myself after each meeting starting in 2015.

After 33 meetings, here are the 10 big lessons learned. 👇

👉 1/ No surprises… ever

Before each board meeting you should have pre-board calls with each board member.

Address the big board meeting topics in that call.

Surprises in the meeting will absolutely derail the meeting.

👉 2/ Send monthly board updates

This will again eliminate end of quarter surprises and build trust with your board.

Losing trust with your board is hard to regain.

Keep the updates consistent MoM

*Financials *CEO summary / perspective *Good news *Bad news

👉 3/ Have a great independent board member

This is your secret weapon.

They will tell you what the board is really thinking, how to improve and will give you the cold hard honest feedback you nee.

We wouldn’t be where we are today without Dave Balter Ralph Folz

👉 4/ Let your team run the show

As CEO, you should do the executive summary and add commentary to other slides but your executive team are the ones presenting.

CFO - finance slides Catherine Faber, CFA, CPA 🙏 CRO - revenue slides Dan Pratt 🙏 COO - all reporting and KPIs Sean Bave 🙏

👉 5/ Don’t pitch, report the news

This isn’t a sales pitch. You should be reporting the news.

A great board meeting should feel unremarkable and straight forward.

I was always taught to always be selling/closing… but don’t be here.

Be a news reporter

👉 6/ Bring council

Company council should be at the meeting. All major firms like Cooley will attend the meeting for free as a value add to the company.

They take valuable notes and are needed to make sure all equity voting and board minutes are properly approved/documented

👉 7/ Assign one person on your team to take notes

Take notes on each board meeting.

What worked? What didn’t work? What were big questions from board?

Use this to improve your next meeting and it will stop you from making same mistake 2x

👉 8/ Have a strong agenda and stick to it

After lots of testing here’s the agenda we always go with for a 3 hour board meeting.

15 min - minutes / equity vote (CEO) 1 hour - financial core KPI updates (Exec Team) 15 min - bathroom/email break 30 min - major topic 1 30 min - major topic 2 30 min - investor only board session

👉 9/ Design matters

You won’t get judged on your deck design.. But you will

Nobody, including your team wants to stare at an ugly, hard to understand and look at deck for 3 hours.

Put in the time. Make an amazing template and just reuse it.

10/ You’re married to your board

Board members especially independent board members are critical to your success

Additional input from ChatGPT

🚀 1/ No Surprises… Just Like Coding

When coding, you expect no glitches or surprises, right? Board meetings are the same! Engage in pre-meeting sync-ups with each board member. It’s like debugging your code before the product demo. Surprises? Not on our watch!

🔁 2/ Monthly Updates - Your Agile Sprint!

Just like agile development, consistent, monthly board updates are key to eliminating end of quarter plot twists. Trust with your board is like your codebase - once broken, it’s tough to repair. Give a 360-degree view - financials, CEO thoughts, the victories and the bumps along the way.

🤖 3/ The Independent Board Member - Your Trusty AI

You know how you have that one AI tool that just makes everything better? That’s your independent board member. They’re your secret weapon, your algorithm providing honest feedback and invaluable insights. We’re looking at you, Dave Balter and Ralph Folz!

🎮 4/ Team Control - Just Like A Multiplayer Game

As CEO, you’re the game designer, but let your team play! You outline the executive summary and comment on the slides, but let your executive team take the lead. It’s like assigning roles in a multiplayer game, everyone playing their part.

The rest is coming up! Buckle up, we’re still on this thrilling startup roller coaster!

Coming from Google, steering board meetings was an alien concept to me, but I took detailed notes after each one, starting back in 2015.

After 33 board rooms experiences, here’s my distilled wisdom, encapsulated in ten powerful lessons for you fellow startup captains.

Lesson 1: No element of surprise, please!

Engage in pre-board dialogues with each board member, ensuring all the significant meeting points are discussed. Surprises? They’re a sure-fire way to sabotage the flow of the meeting.

Lesson 2: Deliver monthly board updates

Keeping your board in the loop monthly wards off those end-of-quarter shockers and fosters trust. Always aim to maintain consistency in your updates, which should include:

*Financial status *CEO insights *Good news *Bad news

Lesson 3: Cherish your independent board member

They are your secret weapon, ready to give you an insight into the board’s thoughts, offering constructive criticism, and, most importantly, providing unfiltered feedback. Our journey at Broadlume would have been drastically different without the inputs of Dave Balter and Ralph Folz.

Lesson 4: Empower your team

As CEO, your role in the meeting is to provide an executive summary and commentary on various slides. But the real showrunners should be your executive team.

CFO - handling finance slides, CRO - managing revenue slides, COO - dealing with reporting and KPIs

Lesson 5: Report, don’t pitch

This isn’t your sales deck. You’re there to present the facts. The essence of a great board meeting is its simplicity and straightforwardness. Remember, your role here is more of a news reporter than a sales rep.

Lesson 6: Bring in your counsel

Having your company counsel in the meeting is a must. Major firms like Cooley often attend these meetings as a part of their value-added service, ensuring proper documentation and approval of all equity voting and board minutes.

Lesson 7: Appoint a dedicated note-taker

Ensure someone on your team is documenting each board meeting’s proceedings, focusing on what worked, what didn’t, and the critical questions raised by the board. This will serve as a guide to refine your next meeting and help you avoid repeating mistakes.

Lesson 8: Follow a robust agenda

Post numerous trial and errors, we’ve landed on an effective agenda for our 3-hour board meetings:

15 min - minutes / equity vote (CEO) 1 hour - core financial KPI updates (Exec Team) 15 min - short break 30 min - main topic 1 30 min - main topic 2 30 min - board session for investors only

Lesson 9: Aesthetics do matter

While you might not be explicitly judged on your deck design, a visually appealing, easy-to-understand deck will surely elevate the overall experience.

Lesson 10: Your board is your partner

Your board, particularly independent board members, play an integral role in your journey to success. Treat them as partners, not adversaries.

Remember, a successful startup requires more than just a compelling product or service - it demands wise leadership and effective management of your board.