FMB: Running board meetings (Part 9)
This is a continuation of my Founders are Made, not Born series. Part I here.
Three times in the past week I found myself sharing best practices with founders about how to run optimal board meetings.
One was a seed stage founder who is preparing for their first board meeting and wanted to get it right. Another was a Series B founder who was worried about the amount of prep required, usefulness with other priorities, and hesitant to make them more frequent. Another was a Series C founder whose board meeting had now expanded to 12–14 attendees and was wondering how to best manage such a large group.
Board meetings are these big things built up in movies to look like formal events in skyscrapers, a huge wooden table with 20 people around it. Kind of like Succession. In the modern world of startup meetings, its often 4–8 people over zoom. No suits.
Some of the biggest misconceptions about board meetings:
- They have to be 1x per quarter
- The focus is all on the numbers and updates
- The CEO should do all the talking
- They’re 3–4 hours
Here’s what makes board meetings go REALLY well:
- Materials are sent out 2–3 days in advance
- Founder requests board members email back tactical/clarification questions BEFORE the board meeting
- Founders or their team emails back replies to all the tactical Qs before the board meeting starts
- The board call centers around 3 key discussion topics. The team can send pre-reading materials to the board on the discussion topics so they’re prepared. Should be key consequential decisions the leadership has been debating the last few weeks
- There are 2 distinct sections of the board meeting: 1) General session where everyone is invited (C-suite/Heads, Observers, Board) and 2) an Closed Session only for the Board Members/Directors including founders that focuses on open assessment of talent, culture
- C-suite or Heads of teams come in and present their area of the business to the board. This gives team members a chance to shine, takes all the preparation work off of the CEO/founders/chief of staffs, and helps the board become more familiar with team and inner workings. If you are pretty small and don’t have heads/leaders to present, you can give a company overview
- For large boards, one non-founder investor can also gather feedback from the non-founder board members after the call about how it went, and how future board meetings could be improved
- Keep them short and sweet. All of my startup boards range 1–2 hours (mostly two hours). Also I like to have board meetings every ~6-8 weeks for fast growing startups where every other board update is not a full metrics update (to save some prep time)
This can be summed up as:
- Send Early
- Context Set with Metrics before and during Meeting
- Discuss 2-3 Meaty Things
- Let your Team Shine
- Get Feedback
I also like Mike Maples at Floodgate’s perspective. He says there are really only four things a board needs to consider:
- Has the market changed since we last met? If so, did it affect us negatively or positively?
- Has the team changed? For better or worse?
- Has our position in the market changed?
- Did we do what we said we would?
So what should you include in the context session? It depends on each business, but typically I like to see:
- Performance v. Forecast for all key KPIs — what did you think you were going to do, what happened, & why the delta since the last board meeting? Key KPIs probably include engagement/usage, retention, & financials
- Financials — P&L, unit economics, cash + runway
- Market — trends, regulatory, competition, positioning, geography
- Org — org chart, key hires, talent topics, headcount forecast
- Product — roadmap, customer feedback, engineering
- GTM (Sales/Marketing) — acquisition channels, CAC, spend, pipeline
PHEW. Sounds like a ton of work right? One of the secrets of effective board meeting prep is setting up your systems and dashboards in a manner where you are already seeing this information on a weekly basis, to manage your internal teams. So when it comes to a board meeting, you can just copy/paste or edit the design a bit but not have to calculate every number from scratch. It’s hard to get there but if you make it a goal, boards will become easier and easier in just a few quarters (and with more people). The point of this is to run your business by the same metrics you would show the board. Easier prep is a side benefit.