Board of Directors: Number of Meetings

As Jim and I continue our Board Meeting series, we’ve decided to address a question that we are often asked – “How Many Board Meetings Should A VC-backed company have?”

Our general answer is “as many as you should for the stage of the company that you are.” We define stage loosely, where you evaluate the company’s revenue performance, the rate of growth of revenue, the headcount of the company, and the strategic issues the company faces. If you – dear reader – are a rational person – you should be responding with the thought “thanks guys – not helpful.” Stay with us – we’ll try to be more prescriptive, but – having been involved in lots of companies, with lots of different boards (and board dynamics) – we know there is no simple and correct answer.

Our experience suggests a private, venture-backed company should have between 8 and 12 meetings a year, with at least half of them face to face. As a company grows and matures, the number of in person meetings will logically decrease, but should never fall below one each quarter, preferably in the first month of the quarter so the performance of the previous quarter can be reviewed while it is still fresh and current.

If you’ve just closed your first round and it was a seed or Series A financing, expect that you will likely to have monthly board meetings. Yep – you heard us – expect to have 12 meetings per year – and it’s best if these are in person. Try to have your meetings set up on some recurring monthly basis like “the third Thursday of every month”. This helps schedule the board and increases the likelihood that board members can actually attend in person. Also, a monthly meeting which shifts from month to month (for example – the third week one month and the second week in another) may not allow enough time to elapse in between meetings.

Your early stage investors and board members will want to be (and you should want them to be) actively engaged in the company. You’ll be dealing with a huge range of issues in the startup phase – frequent, substantive, and open discussions will help keep all the board members up to speed on what is going on and engaged in the decision making process. Since a lot of significant events transpire at a rapid pace in a company at this stage, these regular meetings help the board maintain a level of awareness that enables them to engage in the activity of the company. In addition, a young board needs to learn how to work together – the best way to do this is “to work together” – regular meetings will reinforce this.

Additionally, CEO’s of venture backed companies (or any company with a board of directors) should expect to have fluid and candid dialog with board members in between meetings. Board member styles differ – some (like me) are email guys, some are face to face types, and some are phone call update types. We recommend understanding how each of your board members works best and make sure you spend time with them in between board meetings discussing issues, updating them on the business, and learning how to work together.

Some of this is preparation for later in the life of a company when a board has to make critical and substantial decisions, whether around a financing or M&A event, major change in the direction of the business, leadership change, legal issue, or something else that requires hard discussions. Spending time building working relationships, learning how each other think, work, and act, and developing personal rapport early in the life of the company helps makes dealing with these situations a lot more effective.

Some entrepreneurs have resistance to this level of oversight. If you’re someone who has a negative reaction (e.g. “12 meetings a year – no way!”) we encourage you to re-think your interest in a pursuing a model to build your business that includes venture capital, or for that matter your interest in having a board of directors.

Finally, while it is common that as a company matures, it will reduce the frequency of formal meetings (to say 6 meetings per year), the board will encounter periods of time where they will meet more often then once a month. This can happen when a company is approaching the end of a fund-raising cycle or during key times in the company’s life where substantive strategic actions are being managed (for example – an acquisition.) During these critical times it is common for a board to have formal – but short duration – meetings, both in person and over the phone.

  • http://ben.casnocha.com Ben Casnocha

    In my experience an entrepreneur’s resistence to such regular meetings (such as 12 a year) is the preparation time of creating the spreadsheets, printing out agendas, thinking about specific topics and order, and the like, not that he doesn’t want to spend a couple hours once a month with helpful board members.

    So, it’s important for there to be clear expectations about what the CEO is expected to do in advance of meetings if they happen so regularly.

  • http://www.venturegeek.com Nathan Dintenfass

    I have to agree with Ben — I have seen many cycles get burnt preparing for Board meetings in young companies. Balancing the desire to have everything nicely packaged for the Board with the need to “get on with it” is something that would be worth giving some attention to in the context of this posting. Having hands-on advice and help from a Board on a regular basis seems like a great thing for a young company, but spending a day a month (or more) just pulling together reports doesn’t seem to make sense for anyone involved (and Board members never see all that time being spent, so they aren’t always in a position to understand the implications of having a formal meeting as opposed to an informal catch-up session).

  • http://www.newmanva.com/blog Ari Newman

    I’ve sat in a number of 3+ hour board meetings where the entire management team does a dog and pony show, telling the board what they think they want to hear so that the exec team can “get back to work”. It does both parties a dis-service. Monthly meetings, with every other one in person seems reasonable for a fast moving start-up that needs to hear from it’s advisors and get external support. As the frequency of the meetings increase, the amount of formal reporting and presenting should decrease. It saves both the company and the board members time. On a related note – I’d love to see you guys share some effective templates and formats for strategic and operational reporting that you have found to be efficient and effective (maybe you have and it’s in the archives?). Consistency in reporting is important as well – finding good mechanisms and formats and sticking to them over at least a 3-6 month period is important. What good is a metric or a chart if the variables change month-to-month?

  • Don Springer

    In the early stage of a company’s life (Series A), I have found the following break-outs of our monthly board meetings to be most effective:
    – BOD mtg. following quarter end. Full session including BOD, executive team. This includes a formal board package with writeups by dept. and critical areas of the business. (longest meeting we have).
    – BOD meeting after 1st month of new quarter. Short session with BOD members only. Use a one-page company dashboard that highlights/tracks the most meaningful issues by dept./for the company.
    – BOD meeting after 2nd month of new quarter. Medium session inluduing BOD members and exec. team. Cover the one-page company dashboard. Provide time to drill-into and discuss a critical strategic item for the company.

    This above format allows the board/executive team to get to know eachother well, and see how we all think/deal with the fast-pace needs of our copmany. I also think the formal session once a quarter with a more comprehensive BOD package keeps my team/BOD members more professional and results driven.

  • http://www.ajira.com Nari Kannan

    I totally agree with Brad on all of his points. In fact, at my last company (venture-funded) I have seen the monthly meetings (exactly on the same nth day of the week) work very well since you know the calendar for a year upfront. John Shoch of Alloy Ventures did a tremendous job of streamlining what they expected and made it as easy as addressing key elements and preparing the same set of spreadsheets and charts every month. Since different members of the management team were responsible for different sections (like Sales, Technology, Customer Service and Support), once the CEO delegated these, preparing for each board meeting was no more than a couple of hours for each team member.

    Most impressive for me is that the structure of the reporting emphasized all aspects of growth – short term (like new prospects generated, prospects converted, etc) to longer term issues such building a solid tech team, putting in place a proper development methodology.

    In an early stage, you can get caught up on so many short term fire fights that longer term progress may be neglected. But sometimes concentrating on some intangible longer term issues can set the stage for solid short term gains, although you may not realize it in the beginning. Directors like John Shoch who have respect for these things add incredible value to the management team. Regular board meetings with a proper structure reinforces the need for and progress made along many different fronts!

    Good Topic, Brad!

    Nari

  • http://www.taliaben.typepad.com Tali Aben

    Agreed that 8-12 is about right (usually 10, skipping December and July). However, one of the most important points is that board meetings should not be used for mundane updates. Provide the directors material a few days in advance – and directors – read it!
    This makes for not only shorter board meetings, but those that are much more effective.

  • http://www.howardlindzon.com howard Lindzon

    very helpful – thabnks

  • http://www.vijayanand.name Vijay Anand

    I agree with Brad.

    I think the folks that are disagreeing are forgetting a key aspect here. These are startup companies and not evolved corporates. The difference is that, just like an infant, a startup does require constant looking into. As far as I am concerned, personally, if I was at the helm of the company that is being funded, I would have to know pretty much everyday and by the end of every week how the progress of the company is and where we are heading towards – maybe its just me and my obcession with stats and vitality signs, without which I’d be rolling over sleepless; neverthless to say, they are quite good practices. When you have those numbers in hand anyways, it is not a major task getting them organized and presenting it in front of the board – afterall, What you know is all that the board is asking for. If you are taking a week to put together a spread sheet, either a) You have no idea where the company is heading or b) You are trying to figure out how to manipulate the data to make it look good. Both of those are terribly horrible things to do.

    As I said, like watching over an infant, keep watch over it. And as frequent as you can, maybe even get yourself a baby monitor – on hind sight, scratch that analogy. There are too many related events going on in the industry eerily close to that :)

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