CHAPTER 12

Getting Ready for Your First Board Meeting

“We’d like you to join the board.” For an executive, those words can be a career highpoint and the culmination of years of effort (especially if it’s your first board invite). But after high-fiving yourself and updating your LinkedIn profile, it’s time to get serious on preparing to walk through those boardroom doors. Unfortunately, as with so much else in the world of directorship, orientation for joining a board is usually left to happenstance.

When a corporation hires a top member of its executive staff, it does things right. There will be lots of paperwork, careful spelling out of terms, and hammering out a compensation agreement that’s a lawyer’s dream. The executive will get an “offer letter” that sums up these terms in black and white, making clear the comp structure, the legal terms of hire, dispute handling, do’s and don’ts, and other needed legal boilerplate. The new exec is then put through a careful orientation and seasoning process.

But what happens if such a prospect is elected as a new member of a board? Often, formalities are limited to a handshake. The compensation for directors of public companies is a disclosure-filing item—but the one person with a direct interest in this pay plan is usually the last to get a piece of paper with details. For that matter, no one seems to care if the new director knows board standards on expenses, perks, potential conflicts, and so on.

This guarantees that the successful board wannabe starts out left-footed at that first meeting, feels awkward, makes a bad impression, and takes longer to become effective—unless everyone makes new director orientation their business.

Although board orientation is a universal part of board operations, it is handled mostly by rote, and with the least concern about adding value. It’s hard to find any member of any board, business, nonprofit or somewhere in between, who doesn’t recall orientation to the board as an ineffective waste of time. So how to make it better?

Start by confirming what the board actually expects the orientation to achieve. Reducing time and effort needed for the new member to be more productive? Better ability to deliver on specific tasks expected of this director? Helping the new member gain a more realistic view of the job? Briefing on current issues facing the company and the board? Try laying out four to six specific goals of the orientation process—and then work on tools to meet them.

Make good use of current board members in orientation. The board orientation package is usually a pile of documents, contacts, and reports swept together by the corporate secretary and legal counsel. Any further activities recommended for the novice typically are suggested by these same players, plus the board chair.

But what about the rest of the board’s membership? As part of the board’s evaluation process, survey current members on the quality, depth, and provision of material and discussion offered by new directors. What did these alumni find most (and least) useful, and what changes would they suggest? Furthermore, encourage current directors to sit in on orientations to provide insights (and, discreetly, catch up on items they may have missed themselves).

Speaking of board upperclassmen, the board should designate one seasoned member to mentor each new member as a personal assignment. This not only benefits the novitiate but also serves as continuing education for the board mentor, nudging him or her to give fresh thought to the aspects of board service that are most important (one of the best ways to learn is to teach). Consider the mentoring approach as part of overall succession planning, with a retiring director showing the ropes to the trainee filling his or her particular role on the board. (There’s more on making the board newbie/mentor relationship effective below.)

No one ever seems to follow up on board orientation. Why not? Not only can the board learn what the fledgling board member is missing out on, it can also gain immediate feedback on what worked and what didn’t. The board chair should book several phone calls with the new director over the first few months to follow up, and don’t be afraid to ask what could be done better with orientation. Then, ask new directors at six months in and at one year to fill out a brief evaluation of their breaking-in period. What was missed? What proved of value (and didn’t)? How effective was the format? Who else should be involved?

Now that your “new hire” paperwork is completed, it’s time to prepare yourself for the job. What exactly can and should you do to make yourself ready? Here are some pointers to help you hit the bricks running.

• Read. Block out time and dedicate it to reading everything the company can make available to you. This goes beyond the normal pre-meeting board book—cram on annual reports, filings, disclosures, board bylaws, past minutes, and agendas. Yes, you read this as part of your interview process—but now study it. Let the CEO, board chair, company secretary, CFO, and company counsel know that you’re up for any material they can send your way. An hour or so of daily swotting before your boardroom debut will quickly add up.

  As with any study session, take lots of notes—what are financial high points, strategy issues, and unanswered questions? What does a review of past board and committee minutes tell you about priorities, meeting style, and major board players? And don’t forget to go outside of channels for intel. What does Googling the company name bring up? (BTW, if you discover any big surprises at this point, you haven’t done your earlier board search groundwork.)

• Remember how I told you to take notes after your board interview? Now is the time to break these out for review, to refresh yourself on first impressions and unanswered questions.
• While you met with the board chair/lead director during your vetting process, set an appointment for a specific board orientation discussion, one-on-one. If the chair and CEO are the same person, who is the board’s independent leader? (And if this is the situation, add a meeting with this leader.) Definitely dedicate some time for discussion with the chief executive for his or her take on the board and its role.

Here’s another idea to consider—when you walk into that first board meeting, there should be no one in the room you haven’t at least shared an introductory telephone conversation with. Get on the phone (and preferably share a cup of coffee) with as many other board members as possible, especially committee chairs. When you ask the corporate secretary, CFO, and counsel for info, also chat them up for their take on the board and its issues.

• What to talk about in these pre-board discussions? Cover current and coming concerns for the board. What are the chair’s priorities? Can you detect differences between how the board leader and the CEO view the board’s role and value? Debrief committee chairs—use active listening to learn not just what their roles are, but how they approach them. Draw up a list of questions to ask each of these participants and take notes on responses.
• Annual reports for public companies nowadays are a handy facebook of info for your fellow board members, but you’re likely not taking your first boardroom plunge into a public firm. So create your own guide. Google up info on the directors, their affiliations, experience, and major achievements, and also grab a picture or two of each. Put this together into your own facebook of the board, and study it to assure that you’ll know who that face is across the table, his or her name, and outside roles.
• Now, ready yourself for that first meeting. Think back over your board interview vetting process to clarify in your mind why they specifically wanted you for this board. What skills, connections, and qualities were you selected for, and how can you best deliver them? Also, think back on your past board experiences. What did you like (and dislike) about the people you’ve encountered in previous board settings? What behaviors seemed effective, ineffective, and even irritating? Is there a boardroom mentor in your network you could model yourself on?
• After all the prep above, now you actually prep for the meeting itself. Pore over the meeting info you receive in advance (if the company uses a board portal, it’s wise to print out some materials for note-taking). Study the minutes of the last board meeting for clues on how this board works its agenda. Review the financials, marking anything you find unclear for further research or questions. Does supporting material for action items seem adequate? If this company uses a board portal or other electronic venue, ask the company secretary about a quick tutorial on its use.
• Board meeting day! Arrive early, and hobnob (this is when your facebook prep comes in handy). Try to gauge if there is formal (or informal) reserved seating. If the board’s leader has a moment, ask about any last-minute updates. The chair may introduce you after the meeting convenes—have a few “I look forward to . . .” words ready to offer. Also, have two or three questions/comments at the ready, but make sure they’re good ones (no nitpicking about a typo you found on page 47 of the financials, please).

The topic of prepping for that first board meeting is so crucial that I held a roundtable of some seasoned directors to ask a simple question—“What do you do to better prepare for a board meeting?” No fair saying the most obvious—“Be sure to read everything carefully!” Instead, what other tricks have these boardroom solons discovered to make themselves more effective before walking through those oaken doors?

• “I try to put myself in the place of the board chair, and think like a chair,” says Karen Kane, former board secretary to the Federal Reserve Bank of Chicago, and now a governance consultant with Karen Kane Consulting. That is, look over the agenda and meeting material with an eagle eye for “the totality of the meeting, and the questions you should ask.” What are the major topics, and what input will they need from you? What items have the most supporting material and will demand the most discussion? Which might be contentious or require added leadership? Prepping with the eye of the chair or lead director who must run the meeting will pay off in fresh perspectives.
• Another great tip from Kane—check your own board bio. Public companies, in particular nowadays, offer a brief bio of each director in the annual report that not only hits your career high points but also notes specific skills you bring to the board. “I ask myself why I was chosen to be on this board, what my matrix of responsibility is, and then pay special attention to those items.” Is the selling point of your vitae experience with new ventures or overseas markets? Then look for items that touch on those in the agenda—and be ready to deliver. (This also gives you insight on what the other board members know about you.)
• Brushing up on the company’s news seems a natural part of meeting prep. But, Carla Carstens, president of Carstens Associates (and a member of several trust and fund boards) adds a clever twist. “I check up on the competition too, their earnings, trends and industry data. On fund boards, especially, it’s important to know what’s in and out.” This applies to other industries as well. Competitors are facing the same issues and pressures that hit your company, so bringing the directors’ unique “inside/outside” view can help company execs think outside their corporate box.
• A great tool in prepping for your first board meeting is close review of materials from the previous board meeting. Look over the agenda and materials on business left unresolved, or “matters arising,” and compare this with that meeting’s minutes (which should have come with your new board pack). What was lost in the shuffle or missed? Just how well do the minutes of that last meeting compare with the agenda of what this board set out to accomplish?
• As a final tip, Carstens never hesitates to reach out to board chairs or other directors before the meeting with a quick phone call for clarifications. Newbies aren’t expected to know everything.

There’s a reason I’ve stressed getting to know the people on a board at least as well as you learn the business and its numbers. At your first board meeting, look around and ask yourself how much you really know about these people. The chief executive, the other directors, a top manager or two, maybe some investor or fund representatives. You’ve reviewed their background, can discuss numbers with them, and share offhand chats about vacation plans. Still, much about the men and women sitting at this table with you will remain a mystery, even after you’ve been here awhile.

Try to clear up these mysteries as early as possible. Consider that your reputation, your fiduciary duties, and possibly even your personal assets, are firmly tied in with these ciphers surrounding you. Their ethics, their legal and personal skeletons, their business dealings, past, present and future, are all now commingled with your own in this entity known as the board of directors.

Do an online news search for the term “board of directors,” and notice how often the stories involve a company and its prospects cratered by one board member’s malfeasance, inattention, or foolishness. A CEO who is self-dealing or whose messy personal life drags down the company. A director whose firm was subpoenaed by the Justice Department. A sweet consulting deal that someone on the outside discovers in all those disclosures you apparently didn’t read closely enough. A board member whose online postings provoke a boycott.

Those people you’re sitting at the table with—do any of them have such explosions just waiting to happen? And do you realize that, as a fellow board member, you can be just as tainted by the actions of your weakest link? Early in your tenure (if not before) take a closer look at those folks you’re sitting with.

Your boardroom apprenticeship will benefit from the above tips, but some novice directors find it even more useful to seek out targeted mentoring from within the board. Here is an example.

Q: “I’ve finally made my break into the boardroom! After years of building up my own financial services and consulting firm, I’ve been asked to join the board of a major regional bank here in my state. Although I have some nonprofit and family-firm-board background, this bank will be a bit of a boardroom reach for my experience. I know a couple of the current directors (that’s how I came up on their radar). Would it be proper for me to ask one to serve as a board mentor?”

A: It would be quite proper, but don’t jump in with any mentoring requests until you’ve fully weighed your situation. Many of the rules of good overall career mentoring apply to the boardroom, but some become more crucial.

Start by asking yourself a few mentoring questions. What specific board skills do you need to seek (finance, power structures, boardsmanship, company resource people, meeting conduct, etc.)? Are the board leaders who invited you to this dance really the ones best able to provide the insight you want? How would you like to be mentored (more hands-on guidance? An occasional word to the wise?)? Assuming you find someone who meets the above standards, will he or she actually have the time and interest to be your mentor?

While mentoring can be a fairly specific relationship at the corporate executive level, in the boardroom it tends to be more relaxed. “I would say more boards do it informally,” observes Elise Walton, principal of the BoardCompass consulting firm and a recognized governance authority. “It’s more along the lines of ‘hey, why don’t you talk to Sue?’”

Lois Zachery, founder of the Leadership Advisory Services mentoring consultant firm, sees the board situation as ideal for what she calls “mosaic mentoring”—tapping “different mentors in different areas to help you work toward your goals.” For instance, a current graybeard on the board can cue you in on how discussion is handled in this boardroom, while someone from the finance staff can be your Sherpa on the intricacies of bank auditing and risk. This approach also helps if a single member of the board is too booked up to serve as an exclusive mentor.

Finally, board mentoring adds to the “two-way street” aspect of mentoring. “Mentoring is a partnership—it’s really important to cultivate your relationship with this person,” says Zachary.

A mentor can also help clue you in on unspoken rules of a particular boardroom, those things no one thinks to mention—until you violate them.

Q: “I own a financial consulting firm, and we’ve grown considerably over the past few years. One of my business contacts asked me to join the board of a major nonprofit in our state. This is quite an honor—this organization is a major player in its field and has some big regional names on the board. I’ll attend my first board meeting next month. My question may sound a bit odd but, given the status of this group and its board, what should I know about seating at the board table? Do I just grab the nearest chair, or would that be a faux pas?”

A: That’s actually a good question, and one that too many board members, both novices and long-timers, can mishandle. Seating arrangements in the boardroom do indeed send distinct messages on status, ranking, and seniority, but most of these messages are subtle.

Place cards for board members at the Big Table are uncommon outside of traditional, top-tier boardrooms, so you’ll need to do some checking on your own. Start with the contact who brought your name up for the board seat. I’ll assume he or she is a director, but if not, can point you to a member or two who can offer a few mentoring tips, including who sits where.

Should this prove unrevealing (“Oh, we just sit wherever . . .”), don’t just assume it’s OK to play musical chairs. Try scoping out the situation at your first board meeting. “There is psychology involved in all meetings, including boards,” says Sharon Livingston, who heads a marketing research firm Livingston Group.

Step one is to find out where the chair or person leading the meeting will sit. Unless this is marked by an extra-large pile of paperwork, try to orbit the room until the chair sits. Livingston finds that our image of the chair always sitting at the head of a rectangular mahogany board table doesn’t square with reality. “The leader can sit anywhere, and that becomes the seat of power.”

You’ll find board members arranging themselves around the leader in a certain pattern. “The position directly opposite the leader is in a challenging position,” observes Livingston, though sometimes the leader wants a supporter in this spot for just this reason. The person directly to the leader’s right is typically a second in command, and the person to his or her left a third in the structure, or staff support. The terms “right-hand man” and “left-hand compliment” were coined for good reason, she notes.

Since your nonprofit likely has both a board chair and chief executive running the meeting, look at their respective seating positions and amount of “air time” to judge their power-sharing.

Now that you know where the key pieces on the boardroom chessboard are, where should you sit for your first meeting? If the chair is at noon on a clock face, try to tuck yourself in at 4 or 8 o’clock. “These spots are out of the limelight, and a good place to sit until you figure out what’s going on,” Livingston concludes.

More often, though, the problems facing a virgin director won’t arise until after you’ve taken your seat.

Q: I’m an independent director with a growing food sector company board, and have served for several months. I have a long marketing background with a Fortune 500 company, and I’ve been told that this experience was a factor in asking me to join the board.

This company is making an expansion into some new areas, and the marketing staff gave a presentation at our board meeting last week on their strategy for shifting resources into the new sectors. Overall, I thought the plan was sound, but I dug deeper into some tactical issues, like budgets, media choices, and timing. These are areas I work on daily, and I wanted to make sure that the staff had thought out their options.

After the meeting, though, our lead director gave me a call, and suggested that I’d been out of line by diving into strategic details more than was necessary to do our board job. He felt I was putting staff on the spot. I believe that I was just doing the governance job they picked me for. Thoughts?

A: The first thought of many business people is likely that, yes, you were offering just the valuable marketing insight you joined the board to provide. There might, however, be cases where you could be micromanaging a marketing strategy that you and the board had already signed off on after thorough discussion. It’s also very possible that this was one specific element of a general strategy, and that this was your first opportunity to give an educated critique. A board tenure of just a few months makes it difficult to read the climate here.

Unless your board and management have given thought to the board’s role in shaping and vetting strategy, with spelled-out responsibilities, timelines, and responsibilities, neither you nor the lead director can truly say that you were right or wrong. Use this issue as an opportunity for discussion with the lead director and the full board on setting the parameters for your board’s role in strategy (and how you fit into it).

“Suggest that your board spend time in executive session talking about this,” says Bill Baxley, a partner with the law firm King & Spalding and a consultant with the firm’s Lead Director Network. “Ask yourself questions on how deeply your board wants to be involved.”

Yes, you are on the board to provide your targeted insights in shaping board strategy. But this is the perfect moment for clarifying just when and how those insights should be delivered.

A board of directors at most companies is increasingly a working body, and that requires the specialization committees of the board offer. The well-functioning, effective board of today is really more a group of focused committees doing the heavy lifting of governance, and the biggest power lifter is the audit committee.

One of the most challenging slots a novice director takes on in a boardroom today is a seat on the audit committee. As corporate boards have shifted from a group of advisors to become driven, nitpicking compliance and finance monitors, the learning curve for a new audit committee member has ramped steadily upward. This demands specialized orientation for the new audit member. But how do you prepare for this intimidating job?

The KPMG Audit Committee Institute offers some useful guidance for those new to an audit committee. Among their helpful hints:

• Earlier, I mentioned the importance of cramming on company documents before the first board meeting, but the new audit committee member should devote added study to the financials. Review the past couple years of annual reports, 10-K’s, proxy statements, analyst calls, and any SEC comment letters (and responses).
• Also review audit committee-specific material. This includes the committee’s charter, minutes, and meeting packages for the past year or so, the internal audit plan, and material from the outside audit firm (engagement letter, reports, communications, concerns raised, any deficiencies or misstatements found, and how they were addressed).
• Schedule orientation sessions. Contacts in the company for this will vary, but include the CFO, internal audit staff, and company counsel. Major topics include the company’s status and that of its industry; current financial situation; the role to be played by audit committee members and board procedures; and the current risk, legal, compliance, and strategic issues facing the company, and the role of the audit committee in these.
• Book some face time with the audit firm’s lead partner for your company. Building an open, comfortable relationship here is vital. Discuss present risk assessments, major accounting policies for the company, the scope of audits performed, and recent auditor communications with company staff and the audit committee (and how they were handled). Seek the auditor’s insight on the quality of the company’s audit and finance functions, the quality of its accounting policies, the auditor’s relationship with management, and how responsive and open the company has been with the audit firm. This personal take from an outside audit pro will deliver valuable intelligence on the situation you’ll be walking into.

Corporate board wannabes may view nonprofit board opportunities just as a way to build up their governance vitae and to network toward greater things. If that sums up your take, prepare for an awakening at your first meeting. Nonprofits have a unique governance culture that demands the same standards of fiduciary care as a board engagement. Even if you’re starting your boardroom journey with a nonprofit seat, prepping yourself for it is vital not only for doing a good job now, but also in building your boardroom muscles for future endeavors.

When a successful corporate exec joins the board of a major nonprofit, she brings business savvy and achievement to the governance of a mission-driven group. So everyone benefits, right? Don’t be so sure. Too often, you’ll find clashes, disappointments, and mismatches between the worlds of for-profit and nonprofit thinking.

Steve Scheier, founder of Scheier+Group consultants, has some ideas for fixing that. He consults with nonprofits on best-practice strategy and management ideas, and he is the author of the book, Do More Good, Better, focused on improving leadership and oversight of nonprofits. How can leaders from the corporate world be most effective when they walk into the nonprofit boardroom? I spoke with Scheier on making this oil-and-water blend work:

• “When someone joins a nonprofit [board], they typically feel honored—nonprofits only ask really competent people to serve on their boards. That’s a very human response, but it’s not sufficient. Anybody who’s asked [to join a nonprofit board] should do the same level of due diligence as they would for making a for-profit deal. What do you hope to accomplish? What do you expect me to do? These questions are rarely asked.”
• On giving yourself a reality check before joining the nonprofit board: “I’ve seen nonprofits with successful corporate people on the board, but then they let it drift. Often they just show up. It’s like joining any board—you have to be willing to work. Also, what are board terms—I see nonprofit boards where directors join and never come off.”
• Due diligence on the nonprofit and how it functions. “What is the division of power between the executive director and board? What can I bring to its governance, and how should I set expectations? How much staff turnover is there? What is this nonprofit’s ‘product,’ and is it scalable? How long have key executives been in their jobs? Who are the major donors, and how much do they donate? For example, I can’t tell you how many [nonprofits] are remiss in giving reviews to their executive directors—that’s a constant problem.”
• “Yes, there is often a mismatch when business people join nonprofit boards—they are different animals. For their many similarities—setting objectives, budgeting—there are real differences. Corporate directors come in saying this is the way things should be from my corporate experience. That’s valid and desirable, but don’t get discouraged when your ideas are not accepted. You have to understand the environment and what you’re trying to achieve and how to blend your valuable experience into what can be done. Don’t come in saying, ‘This worked for us, so it will work here.’ Instead, engage by saying that this was my experience and that it could work, so let’s try it. Learn to ask questions before making statements.”

Walking into any boardroom for the first time will be intimidating. But what if everyone else at the table speaks a different language, doesn’t look like you, and has differing cultural/business norms (and, for good measure, you’re jet lagged)?

Global companies increasingly feature global board membership. Maybe you’re a female exec added to the board of a European company facing local diversity requirements. It could be a joint venture with a foreign firm, a merger that has created a multinational board, or just adding expertise from new market countries. Maybe it’s a single director or your own boardroom United Nations.

Whatever the motivators or makeup, a board that has members from various cultures and countries is a governance challenge. How should you ready yourself for the foreign boardroom (and what should you as a global director keep in mind to make everyone comfortable)?

• Build your cultural literacy. There is huge variation in how different cultures confer, debate, and make decisions. Inability to read these differences in the boardroom will make failure inevitable. “It’s impossible to negotiate with people you don’t understand,” says Cynthia Lett, executive director of the Lett Group consultants.

  For example, in Asia (particularly in Japan), freewheeling boardroom debate is considered a breach of good manners. Japanese board meetings are famous for how brief they are—directors quietly confer one-on-one in advance, and the meeting itself is a quick affirmation of what’s already been decided. Find out how people of different cultures on your board approach their meetings, and discuss further with the individual directors.

• Err on the side of formality. “Say ‘Sir’ and ‘Ma’am’ and ‘please’ and ‘thank you,’” counsels Ken Zwerdling, CEO of the Foreign Staffing international search firm. U.S. executives tend to be more direct and folksy in their dealings, while many other cultures respect propriety and hierarchy. Pretending that the German or Middle Eastern board member you’ve just met is your buddy will offend.

  On the other hand, says Zwerdling, “certain cultures like to talk about personal things before getting down to business,” and this means more than just a quick chat on how their flight was. Dinner the night before a board meeting often seems like a nice touch in the U.S. culture, but it could be crucial to the governance workings in another country.

• Check, double check, and triple check that you really have a board consensus. “There is no word for ‘no’ in Japan,” says Lett. Rather, the Japanese board member is more likely to demur, say that he’ll look into it, or offer a face-saving “maybe.” Other cultures have similar roundabout responses, and the director who assumes a room full of positives when he or she just hasn’t heard a firm negative is headed toward disappointment.
• Success in a multinational board setting demands extra emotional intelligence and ability to read body language. Lett counsels that you “look at the nuances of how their legs are pointed, where their hands are, whether they’re leaning forward, and their eyes,” as much as their words. Even if you are conversant in the language of this boardroom, many nuances may still be lost—but body language speaks volumes.
• Use of telephonic or video meetings is popular with directors from distant time zones, especially for committee meetings. But experts warn that the crucial personal nuances noted above will likely be lost. “Use video instead of just voice, and use as big a wide-angle lens as you can to gather as much image as possible,” says Lett. “I’ve heard too many horror stories of [international] conference calls that didn’t go well.”

Board-Seeker Action Items

• Learn where your new company’s board meetings are held and try to arrange a visit to the meeting room in advance. Note the layout and facilities and who typically will sit where. Check on things that may seem minor, but which you’ll want to know (How is security handled to get in? Where are the bathrooms?).
• Set yourself a goal of contacting every member of the new board in advance of your first meeting. Lunch, or even just an email or telephone intro will do.
• As noted above, review the agenda and minutes of the previous board meeting for clues on important issues and how the board handles its discussions. But also do this for any committees you’ll be serving on, even if those won’t be meeting until after your first full board session.
• In reviewing board book materials for your first meeting, make notes of two or three questions you can bring up. Parse these carefully to assure they won’t be controversial, cover material you should already know (and won’t make you or anyone else look foolish).
• Try to grab a minute with the board chair/lead director just before the meeting convenes to query any last-minute tips or items to be covered.