Every CEO and their investors know how important this is. In some companies, the relationship between CEO and Board is a model of trust, efficiency, and focus on critical growth issues. In other companies, CEOs and their Boards unfortunately seem to thrash around and struggle to find the right dynamic.
Building a great board dynamic is not exclusively about board meetings. Good relationship-building takes place with 1:1 connections. But the primary and official vehicle are your formal board meetings. CEOs need to be on top of their game in this arena. In our High-Growth CEO Peer Forums, this CEO Member Challenge comes up frequently, in various flavors and forms. Here is some guidance from HGCF members for creating and delivering great Board meetings and relationships.
ESTABLISH CLARITY– Be very clear on the essential role of everyone in the room:
- Board: financial investment, governance, compensation, pattern detection, selective input on the right strategic topics, help with fundraising, hiring, connections to partners
- CEO and Leadership Team: forecast, execute, report results, give customer/ market/competitive flavor, frame the right key issues, lead the discussion on recommendations and solutions
- Make sure critical Board roles are in place – don’t forget to fill the independent seat(s) and the compensation committee
CREATE CONSISTENCY – Have a standard approach, rhythm, and template:
- Create the appropriate cadence (maximum of monthly, minimum of quarterly) and calendar the meetings at the beginning of each fiscal year
- Send materials ahead of time
- At every meeting review financials, emphasize key sales updates and product development highlights
- Hand-pick and frame 1-3 key topics for each meeting for carefully structured Board input. Focus the presentation on just these items (put all the rest in a back-up appendix)
STAY FOCUSED – The CEO sets the expectations, tone and frames the discussion:
- Avoid the dreaded free-for-all by staying laser focused on the discussion at hand. Do not get side-tracked. Boards will talk and opine on anything… but their role is to approve (or not)
- Don’t get trapped into making decisions at the Board meeting if it’s not warranted. It’s perfectly reasonable to say “we acknowledge and appreciate the input…we’ll work on it and get back to you” and then make a point of doing exactly that
- Help the Board help you by giving them meaningful projects and leveraging their expertise.
BUILD TRUST & TRANSPARENCY: Be extra, extra careful about setting the Board’s expectations about revenue and other critical metrics. Missing the plan of record erodes investor confidence quickly and missing it repeatedly can lead to a CEO change:
- Remember, the CEO knows the company better than anyone else so don’t agree to plans you don’t believe in – even if you feel pressured to do so
- Sometimes CEOs need to temper their own optimism to avoid adopting hopeful versus realistic, negative scenario tested plans
- When big macro trends like pandemics, recessions, wars and bank meltdowns cause unforeseeable disruptions, or other major negative forces appear, CEOs should change the plan asap with feedback from the Board
- Be precise about communicating revenue or growth that is one-off and not repeatable, or a result of timing quirks. Otherwise you’ll be explaining these endlessly in the future.
- Early stage companies should understand, share and measure the metrics that indicate successful progress and learning – which may not be revenue
CREATE TEAM VISIBILITY & ACCOUNTABILITY: Involve your key team members in Board meetings where and when appropriate:
- It gives the Board visibility into your team
- It’s good team member development, recognition, and importantly adds to their personal accountability
- Coach your team members to help them develop their Board presentation skills. Be crystal clear about their role in the meeting. Make sure they understand how to manage Board questions, and how to keep their input focused and aligned with the company’s goals
NO SURPRISES – EVER! Do not wait for the regularly scheduled Board meeting to share bad news – communicate it at once. Good news should travel fast, but bad news should travel faster!