Board Meetings – Do The Formal Stuff First

I’ve been to a zillion board meetings (ok – let’s guess between 1,000 and 2,000 assuming 10+ / month for the past 12 years.)  While the food is usually lousy (but not always, as I’ve seen a marked improvement since I wrote my Board Meeting Food Is Usually Shit post), I’ve found a more troubling pattern than just bad food.  The official business of a typical board meeting is back end loaded.  Specifically, items such as the ones that follow will come at the end of the meeting.

  1. Approve Minutes From The Last Meeting
  2. Review and Approve Option Grants
  3. Discuss Any Committee Matters (such as Audit, Compensation, Nominating, M&A)
  4. Discuss and Vote On Any Other Matters Requiring a Vote

There will always be some things in the voting category that might require an extended discussion.  While a CEO’s tendency will always be to use the bulk of the board meeting to set these issues up, if you have an engaged and informed board, it’s much more productive to carve out specific time without the setup to discuss the specific issues that require a vote.

The problem with these items coming at the end of the meeting is that there is never enough time allocated to them.  Even the most anally retentive CEOs can’t keep a board on a tight schedule and invariable someone needs to leave early to catch a plane, drops off the phone for another call (or meeting), or people just get impatient and rush through these items.  While they usually don’t require a lot of discussion, they occasionally do and there seems to be a high correlation between “important voting items” and “no time left to talk.”

So – if you are a CEO, do your board (and your company, and yourself) a favor.  Do the formal stuff first and give it the right amount of time and attention.  That way, as the rest of the meeting goes off in an unexpected but highly interesting and relevant tangent, you won’t keep looking at your watch thinking “this is good stuff, but we are going to run out of time.”

  • Dave Jilk

    The problem with doing this stuff absolutely first is that often it raises questions that would be answered in the management presentations. I liked to follow Jim LeJeal’s board plan of:

    1. Full session including management team (30-60 min)
    2. Board only session (including management board members)
    3. Non-management board session (it’s hard to have these every time, but you should)

    The voting matters should be taken up at the beginning of part 2 – the board is up to speed, everyone should still be there, and there’s plenty of time left. Always do the easy stuff first – staff options, minutes, etc. Then the rest of the board session can be dedicated to substantive conversation.

    The challenge most companies have with this plan is keeping the management team session short. Everybody likes to talk about what they’ve done or are doing, and this is their moment in the sun, but it needs to be kept short – ideally their slides have already been reviewed by the board so the time can be reserved for questions or just adding a little color — 5-10 minutes per exec maximum.

  • Dave – in my experience, it’s rarely the case that the formal / voting stuff raises questions that would be answered in the management session. In most cases, the stuff discussed in the management sessions have little to do with the formal stuff and often the formal stuff stands out as a complete tangent. In the cases where there needs to be a detailed discussion around the formal stuff, I think it’s much more effective to have that as a separate item on the agenda and to spend as much time on it, resulting in whatever vote is required. Doing this up front gives the discussion plenty of time; doing it at the end almost always results in people running out of time / disappearing.

  • Dave Jilk

    I didn’t say do it at the end, I said do it at the beginning of the closed board session, which is presumably in the middle. In any case, your approach is tantamount to eliminating the management team portion of the board meeting. First, if you’re going to have a closed board session up front, that will last as long as most of the board sticks around. For the CEO it’s a lot easier to boot the management team than it is to stop the board’s discussion to enable the management team to come in. Second, the management team is kind of “waiting around” for their portion to start – i.e., they are not very productive because they need to remain available.

    Consequently, I would eliminate the management team portion of the meeting if my board wanted to do the formal meeting first. That’s probably fine, although it means that the board gets most or all its information from the CEO, unless they meet with execs outside the board meeting.

    I also have to mention that I think it’s a sad state of affairs that board members can’t carve out the appropriate amount of time for a board meeting, turn off their phones, and pay attention the whole time.

  • Hmmm – let me clarify. I’m simply referring to the formal voting items, not the “closed session.” I would still have a closed session at the end of the board meeting – first with just the CEO and then just with board members.

    The problem is not that board members can’t pay attention the entire time, it’s that the board meeting is scheduled for X hours (usually two or three) and the management team / discussion consumes all the time. While it’s easy to say “this is a scheduling problem the CEO should manage”, I just haven’t experienced it this way, for a variety of reasons (which is probably a longer post.)

    In many cases, especially for early stage companies, the formal stuff won’t take more than 15 minutes. If it requires longer, the CEO can plan accordingly and schedule his team accordingly (say – if it’s going to take an hour, the board meeting starts at 1; management joins at 2pm.) There’s no reason for management to “hang around” waiting for the board members to be ready – this side of the meeting can probably be more easily scheduled.

    Several of the companies I’ve worked with have very well paced board meetings that are managed effectively by the CEO. Most don’t. This is a suggestion for those that don’t. If you find yourself always trying to manage the “tail of of the meeting”, then try flipping it around.

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