Board Meetings for Dummies
Us, You, Me, the Management Team
I write on substack, uninhibited, on topics that I have developed a point of view on. I have a point of view, for management teams, on board meetings.
Board meetings have been a fixture of my life for the last 15 years, on a quarterly basis. As a management team member, I have been on the docket for over 10 years. I have served on two public boards over the last 12 years. I have served on two private company boards, both that I was/am the CEO of—one that was private equity owned, and another venture backed. I chair a private equity portfolio company board, serve on a Joint Venture board with Norwegians and Saudis, and serve on the executive committee/board of a state government authority and a non-government entity. I have presented to an activist investor in a board, and sat with an activist in a board.
The 15 point checklist for management emerged out of not only these outings but my own stumbles. I have written, shared and counseled management team members on these over time, to good success.
The 15 Point Checklist for Management
Mind the Gap: Frontlines of organizations, customers and partners never meet the board of directors and the other way around. Out of design, there is this wide gap that exists between the two consequential cohorts: the frontline and the board. It is management’s duty to bridge the gap. Share as many relevant customer stories, frontline enablement anecdotes as practical in board meetings. I try to have a customer or a partner dial in for 30 minutes to speak with the board, unfettered, with no prompt. The bridge builds empathy and facilitates management’s articulation of strategy and the board’s understanding of the business.
Not an Operations Review: Management team members rise through the ranks doing what works—doing the hard work, hitting metrics, and as they rise, participating in operations reviews. And then comes a day when one gets invited to a board meeting. There is training for everything in business but none for how you should plan your board engagement. So, management takes the same game to the board forum—a punchy operations review with metrics, acronyms and especially highlighting what a great job they are doing. And the presentation lands flat. It starts with acknowledgement that board meetings are a totally different field of play. The change in mindset, the realization, that board meetings are nothing like anything the management team member has ever done, is where progress begins.
Inform don’t alarm: A counsel to me from an enduring, successful leader. The last decade has seen its share of externalities ranging from secular changes in technology and ecommerce to the pandemic, inflation and the great resignation. As a management team member, I have eked in to an alarm-ish stance and then the three words “inform don’t alarm,” have allowed me to calibrate. Somehow, boards don’t respond well to “the sky is falling, but don’t you worry, I have it under control.”
Educate the board: Management team members too often lose patience with board members. I have heard from management the words “they just don’t get it,” with a sigh and exasperation. Board members at best dedicate 8-12 days a year to the company on a sustained basis. They are smart people but not experts on the industry or the company. I have had a CIA director, a major city police chief, a lobbyist, a healthcare provider, a medical doctor, a scientist on boards. It is the managements’ responsibility to take time to educate the board at a high school level on the industry dynamics, terms and abbreviations. Do not lose stamina to educate the board, take them along and you will have a glorious outing.
The Deck: A short deck. Few words and each slide with numbers, digits. No poems, no prose. If I had more time, I would have written a shorter letter, Mark Twain said something along those lines. Boiler plate slides are required especially in publicly listed entities. Insightful slides, in your—management’s voice, most precious. “Appendix,” a friend. Test of a deck: let the Appendix section be as large as the core deck. Maybe.
Board meetings are held outside of board meetings: To take a new proposal, a strategic initiative to board for approval may not always get a good hearing. Boards inherently are risk averse. It is unfair to them to hear the density of a major initiative—organic or inorganic, for the first time, in the board meeting and have the burden to ask intelligent questions, weigh risks and approve. I have not known a CEO who is reluctant for boards to have access to their management team. These, beyond the board meeting connects with management team members serve key objectives including setting the stage for major initiatives ahead. These should always be in coordination with the CEO and not free-lanced. CEOs sending a monthly update is a good chore; a precursor memo ahead of a board meeting, another good practice. On my end, I perhaps over-communicate with my boards where I am in an operating role; a drip along the way, not waiting for the board meeting, to share market or key internal developments brings the board along. Boards, universally, like to hear from management teams.
Tame the provocateur: There is always one board member. The one who stirs it up. The board member challenges the CEO and the management team on an on-going basis. Instead of shielding or recoiling, consider that board member as an effective coach in the sport of building a business. Listening and diligently working through the points that the provocateur brings up builds confidence. A follow up after the board meeting works well. As an operator, I have come to cherish engaging and sparring with the provocateur. There is immense mutual respect: Management teams work the foxhole in the dust and soot of the business, the board member has a helicopter view that they bring to the table for deliberation. These are intellectually stimulating engagements and I just love it.
The 5 percent rule: CEOs should speak for 5 percent of the volume of time during the board meeting. It allows the CEO to develop situational awareness, listen, watch the management team as they participate. The CEO walks away with tangible input. 10 years ago, I heard from a board member at Cisco that John Chambers, even in his last board meeting, sat quietly, listening, filling pages with notes and observations. Forever a student.
Cat and Mouse game: The most regressive dynamic is when the board starts to dig into an aspect and the management team dodges and deflects. In my last gig, with a board comprising of two private equity companies and a charismatic, brilliant chairman, we adopted a strategy: each of us on the management team, at the start of our session, talked about “where we dropped the ball,” in the last quarter. We were doing it in the good, stellar quarters. And then there are always challenging quarters, and that candid, transparent mode had built enough credibility that there was no cat and mouse session; rather immediate focus on the issues.
Winging it: Human behavior makes us defensive. Boards value “I don’t know and will get back.” Winging it depletes confidence. I would write in my notebook these bold words in my initial board meetings, given my natural desire to answer.
Nurse one drink: The dinner prior to the board meeting can be of incredible value if the CEO orchestrates it. I never ever have an alcoholic drink, as part of a management team, at a board dinner. Too often, I have seen management team members feel inspired to have their third drink given the comradery and the banter that emanates with the board members they are seated with.
Playing defense and playing offense: The CFO/CHRO/GC should play defense in board meetings, in support of the CEO, and the board. The head of sales, marketing, product, services, strategy, should play offense given their natural tilt towards growth. Not the other way around.
Its all about Talent: Board members expansively judge management talent, all the time, and form opinions. Management teams should sprinkle insights on their talent stream, individuals, teams even when it is not on the agenda, especially when it is not on the agenda.
Nervous is good: Board meetings make me tense. My wife can tell the week leading up to a board meeting. Prior to a board meeting, being anxious drives positive energy. It drives preparation. Prior to all board meetings, I have my list of anticipated questions and answers written out and I still miss 40 percent of what comes up. When we have not had a dry run as a management team, we have stumbled.
Cross-functional synergy: Most powerful experience and enriching for boards, instilling confidence, is when cross functions come aligned. When the sales leader and product leader finish each others’ sentences, back each others’ strategy in a natural order. When a functional leader, unprompted, volunteers that they did not come through for their colleague, and let them down. Natural topic driven coalitions, between management teams and with the relevant board member makes for a productive outing, and is good for shareholders.
I give myself a B+ over the years, as part of a management team. At any given board meeting, I don’t necessarily check all the boxes on the checklist.
A final advice: Be yourself. Above should be kept in the foreground but not stifle one’s natural stride. Overly choreographed board sessions is not what is sought.
As a people, we are a mosaic. We are a mosaic of people we watch and learn from. This note would be incomplete if I don’t name key leaders who have influenced my playbook for board meetings.
Ed Breen (Tyco, DuPont), Greg Brown (Motorola), Dave Calhoun (Nielsen, Boeing, Blackstone), Michael Capellas (Compaq, Cisco, Flex, Blue Yonder), Courtney della Cava (Bain, Blackstone), Gene Delaney (Motorola), Raj Gupta (Rohm & Haas, Tyco, New Mountain), Guy Jackson (EY), George Oliver (GE, Tyco, Johnson Controls), Judy Reinsdorf (Tyco), Jonathan Visbal (Spencer Stuart), and leaders from Blackstone and New Mountain Capital. I leave out from this list the current, incredibly impressive CEOs, chairs, committee chairs and board members from whom I learn. Given these are currently active, I make a judgment that it is best to not mention them.
What an article! They don’t teach these at B schools.
Super insightful and more importantly.... practical, Girish! Thank you