CHAPTER THIRTY-FIVE

RUNNING EFFECTIVE BOARD MEETINGS

The objective of board meetings should always be to have great conversations that help you and your executive team think clearly about the issues in front of you, as well as making sure your directors have a clear and transparent view of the state of the business. Great conversations come from a team dynamic that encourages productive conflict. Many boardrooms are so ego-laden that people just talk over each other. Our group doesn't function that way. We are engaged and we are politely in each other's faces during meetings. No one is afraid to voice an opinion and we listen to each other. There's no surefire formula for achieving this level of engagement but there are a few guidelines you can follow.

SCHEDULING BOARD MEETINGS

Schedule board meetings far in advance and stick to that schedule so you make sure you have as close to 100 percent attendance at every meeting as possible. Make sure that you or your executive assistant knows each board member's general schedule and travel requirements and whether they manage their own calendar or have their own executive assistant. Set your board meeting schedule for the year in the early fall, which is typically when people are mapping out most of their year's major activities. If you know that one of your board members has to travel for your meetings, work with the CEOs of the other companies to coordinate meeting dates. Vary the location of meetings if you have directors in multiple geographies so travel is a shared sacrifice.

In the startup stage of the business, we ran monthly meetings for an hour, mostly call-in. In the revenue stage, we moved to six to eight meetings per year, two hours in length, maybe two a year as longer form and in-person. As a growth-stage company, we run quarterly meetings. They're all in person, meaning every director is expected to travel to every meeting. We probably lose one director a couple times a year to a call-in or a no-show for some unavoidable conflict but for the most part, everyone is present. We leave four hours for every meeting; it's almost impossible to get everything done in less time than that and sometimes we need longer.

Many years (not every year but as needed) we have also held a board meeting offsite, which is a meeting that runs across 24 hours, usually an afternoon, a dinner and a morning. It is geared toward recapping the prior year and planning out the next year together. It's extra exhausting to do these meetings and I'm sure it's extra exhausting to attend them but they're well worth it. The intensity of the sessions, discussion and even social time in between meetings is great for everyone to get on the same page and remember what's working, what's not and what the world around us looks like as we dive into the deep end for another year.

BUILDING A FORWARD-LOOKING AGENDA

The second step in having great board meetings is to set an agenda that will prompt the discussion that you want to have. As I mentioned in the prior chapter, having a consistent format for the advance reading materials that mirrors the meeting is the key. Keying off our format for Board Books from the prior chapter, our time allocation of the topic areas to be covered during board meetings, assuming a four-hour meeting, is the following:

1. Welcomes and framing (5 minutes).
2. Official Business (no more than 15 minutes unless something big is going on).
3. Retrospective (45 minutes):
   1. Target a short discussion on highlighted issues.
   2. Leave some time for Q&A.
4. On my mind (2 hours):
   1. You can spend this entire time on one topic, more than one or all, as needed.
   2. Format for discussions can vary—this is a good opportunity for breakout sessions, for example.
5. Executive session (30 minutes): This is your time with directors only, no observers or members of the management team (even if they are board members).
6. Closed session (30 minutes): This is director-only time, without you or anyone else from the management team.

This agenda format focuses your meeting on the future, not the past. In the early years of the business, our board meetings were probably 75 percent “looking backward” and 25 percent “looking forward.” They were reporting meetings—reports which were largely in the hands of board members before the meetings anyway. They were dull as anything. They were redundant: all of our board members were capable of processing historical information on their own. Today, our meetings are probably 10 percent “looking backward” and 90 percent “looking forward”—and much more interesting as a result.

IN-MEETING MATERIALS

We also focus on creating a more engaging dialogue during the meeting by separating out background reading from presentation materials. In our early days, we used to do a huge PowerPoint deck as both a handout the week before the meeting and as the in-meeting deck. That didn't work well to create an engaging meeting.

There's nothing more mind-numbing than a board meeting where the advance reading materials are lengthy PowerPoint presentations, then the meeting itself is a series of team members standing up and going through the same slides, one by painful one, bullet by excruciating bullet—that were sent out ahead of time.

Then we separated the two things so people weren't bored by the PowerPoint—because the PowerPoint was new! We started making the decks fun and engaging and colorful as opposed to simple text and bullet slides. That was a step in the right direction but the preparation consumed twice as much time for the management team and we certainly didn't get twice the value from it.

Now we send out a great set of comprehensive reading materials and reports ahead of the meeting and then we have a completely PowerPoint-free meeting. No slides on the wall. This changes the paradigm away from a presentation—the whole concept of “management presenting to the board”—to an actual discussion. Everyone—management and board—is highly engaged. No checking email. No yawns. Nobody nodding off.

PROTOCOL

Attending a board meeting is a real privilege as well as a great learning experience for anyone in the company. Regardless of your meeting format and duration, you need to insist on good meeting behavior from your directors—and, of course, you and your executive team need to role-model it yourselves.

This is your meeting, even if the board is your boss. If a board member is flouting your requests, try to get the whole board to agree on ground rules for meetings so you have additional support in policing offenders.

Attendance and Seating

Miss Manners-y as it might sound, you have to manage meeting attendance and even seating very carefully. I've always thought about meeting attendees in four categories:

• Core executives are the people who are working on the things the board cares most about. They attend every meeting. In our case, that's been our CFO, head of sales, co-founder, and head of product. These people are expected to speak regularly, facilitate specific discussions and be quite familiar with and have relationships with board members.
• Other executives need to cycle through board meetings once or twice per year so they have enough exposure to the board and vice versa, even though they may not be leading any particular topic (though that's a good idea if the timing works). It's important to communicate to them that just because they're not in every single meeting doesn't mean that their role isn't important; it's just a part of the business that the board doesn't focus on.
• Others at the company are invited to join each meeting strictly as an observer. This can be a form of reward or development but it's a great opportunity to give your high-performer/high-potential group a little more oxygen.
• Board observers. Over time, you may have to agree to give someone board observer status in connection with a financing. You should be as parsimonious as possible in adding official observers, as more people around the table can have a dilutive effect on meeting dynamics.

I have only one rule for seating during board meetings. Directors have to sit at one end of the table together. Everyone else can fill in the rest of the table or side seating. This may sound silly but it drives much better conversation among board members if they feel like they're at a smaller table.

Device-Free Meetings

We have all been in meetings where everyone is on a laptop or tablet or smartphone the whole meeting, no one makes any eye contact with the speaker or facilitator and it's hard to get a pulse out of the group as a result. Demand a no-device policy for meetings. If a director insists on using one to take notes, it's okay to request that they do so on paper. Even if they are actually taking notes instead of multitasking, you never know if they're really taking notes or sneaking a peek at email. Make sure to let board members know that if they have to take a call or respond to something, it's okay to do so or you can even schedule a break around it, rather than trying to wedge that activity into the meeting room and meeting time.

EXECUTIVE AND CLOSED SESSIONS

Executive and closed sessions are in some ways the most important parts of board meetings. We always have an executive session (board members only), then a closed session (board members only, without CEO or other management directors) for at least a few minutes at the end of every meeting. Even if there's nothing specific to discuss, it's a good practice to have these sessions for two reasons.

First, if there is something specific to discuss, those who leave the room won't feel like “something is up” since the sessions are a regular occurrence.

Second, you never know what happens to a conversation when the group dynamics change. Even if there is no agenda, no memo, no formal topics, a simple “How do you think that meeting went?” or “What's keeping you up at night that you didn't write about in this Board Book?” can yield a really rich conversation in a smaller group setting.

Our board doesn't hold back much, if anything at all, but the executive session is a good time for us to connect 100 percent freely about management issues as well as elements of business strategy and performance that might be better hashed out without others present.

As for the closed session, it doesn't matter if you're on the board or, more likely, if you're chairman of the board. This time allows the other directors an even greater degree of freedom to discuss the business or your performance without worrying about saying something in front of you—and without hearing your opinion or any defensive (even if unintentional) reaction. Just make sure that another director always closes the loop with you after closed session to tell you what happened or give you any additional feedback or direction that may have come out of it. It's probably best to appoint someone to be regularly in charge of this so there's no question about it.