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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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The Closed Session of a Board Meeting

Comments (9)

At the end of every board meeting I’m a part of we have a closed session.  This is a session that includes only the board members.  All of the boards I’m on include the CEO as a board member so the CEO is part of the closed session.  If there are multiple founder / management board members, they attend.  But – no observers and no members of management that aren’t on the board.

I was on a board call yesterday that was confusing.  The company is doing well, the management team is very solid and stable, and the board packages are comprehensive and transparent.  I’ve worked with the CEO for a long time and we rarely have any misunderstandings (we have plenty of disagreements, but we know how to talk through them.)  The company is mature enough that we’ve shifted into an eight per year board meeting tempo; two meetings a quarter – one in person that is usually deeper and strategic; one by phone that is an update call.

When I got back from vacation on Wednesday, I read the board package.  No surprises.  There are no strategic activities going on for the company (no fundraising, no M&A, nothing "fancy") – just strong and steady execution.  The tempo of the call started off a little odd – the CEO brought up some forward looking concerns of his.  While he was describing them, I was having a hard time connecting what he was saying to the board package I had just read.  As we went through the management team review of the business, I got even more confused as many of the tactical things we had discussed at the previous meeting had been done well and everyone sounded upbeat, although appropriately cautious.  The CEO highlighted a few more concerns of his and then asked an open ended question – something like "what do you guys think?"

We were all on the phone so it was hard to read any nuance.  I expressed my confusion.  I asked a few clarifying questions.  My confusion increased.  Maybe it was jetlag, but my brain was just not connecting the dots.  At some point the CEO took us in a different direction to try to address another issue that he was potentially concerned about.  While the issue he raised had some short term issues, he had extrapolated it as a long term trend.  I didn’t agree that it made sense to extrapolate the trend from one data point, made some suggestions, but felt the awkwardness increasing.

We ended the meeting and went into closed session.  We all took a deep breath.  I told the CEO I was confused.  He was confused.  The other board members on the phone were confused.  If we had a giant time machine we would have gone back 60 minutes and started over.  Instead, we had a great ten minute conversation where we realized that we were just talking past each other.  We hit the giant mental reset button and in a few more minutes had recalibrated.

Even though we usually end after the closed session, this time we decided to bring the management team back in to clarify things.  We realized that when we ended the meeting, we had a leadership team that was likely as confused by the meeting as we were.  I imagine there was sixty seconds of discomfort while everyone gathered where they were wondering what was going to happen next.  We had a short reset of the discussion, clarification of what the CEO was really trying to communicate, and reaffirmation that we were on the right track, even though this was a weird and confusing meeting.

I talked to the CEO today just to check in.  We had a good call and we both reaffirmed that all was cool.  He said he’d learned something important – that if he was just going to "think out loud" during a board meeting that he should preface this with a statement indicating this.  I agreed that this was the right conclusion – that I’d much rather he "think out loud" vs. feel compelled to figure it out all.  I also suggested to him that if he thought I was lost in space, he should just hit me over the head with a brick.

I’m really glad we had the institution of the closed session firmly in place for this board.  It gave us room to figure out what was going on, where the miscommunication was, and reset the discussion.  Without it I expect everyone would have scattered to go back to work with their confusion firmly intact.

  • http://www.jeffnolan.com jeff nolan

    It's been my experience that board meetings in general, closed and open components, only work when 1) people respect each other, 2) board members don't ask questions or make statements just to make themselves look smart, and 3) there is a shared sense of purpose. With these condition met, the closed session works as you describe. On a related note, I enjoy the board meetings I am in with you and I learn a lot from the interaction.

  • http://www.100feetup.com D. C. Toedt

    Brad, your CEO hit the nail on the head about the need to announce it when he's thinking out loud at a board meeting. My experience has been that outside board members are much happier when executives label their information as fact, projection, conjecture, speculation, etc. It helps the listeners assign the information they're getting into the proper pigeonholes. It also gives the speaker an appearance of competence, certainly something you want when talking to your board.

  • Aziz Grieser

    Brad, more of these please. This topic is rarely discussed and the experience and insight is valuable to me.

    After reading the post, I thought immediately of the book, “it's lonely at the top”, from your description of events and personal feelings.

    The CEO of a growing startup has a tough job. They are expected to lead the board meetings smoothly, so everyone is clear, but when he's in meetings with his core team out in the trenches, he has to let solutions be produced organically.

    Bluster Vs. Reason, Confidence Vs. Fear, Directing Vs. Following: there's a differently balanced mixture for every time and place. That's either the smartest thing I've ever wrote, or the dumbest. :)

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

    Fantastic post because it perfectly captures the old line, “The biggest problem with communication is the illusion that it's happened.”

  • http://falseprecision.typepad.com/my_weblog/ Todd Vernon

    I hate phone based board meetings. For me, they are next to useless.

    I also believe if you want to explore new frontiers, do it with Board Members one on one, then capstone it in the Board Meeting, or present it as N possible cases that capture everyones individual positions that you gathered by talking to them.

  • http://pacificgatepost.blogspot.com/ PacificGatePost

    … one of my favorite topics.

    Terrific, the blogging world keeps improving. Some of the quality is terrific. Keep pointing to the good stuff.

    So here's a challenge:

    CONTROL in Britain's and America's boardrooms has shifted for the worse over the past 30 years. As a result, due diligence and oversight are out the window. We are now enjoying the results of this self-serving governance.
    Instead of lauding adulation on CEO's, how about pressing for restructure of their boards of directors. All of them.

    “WE THE SHAREHOLDERS OF YOUR COMPANIES…… >>

    
http://pacificgatepost.blogspot.com/2008/03/board

    The sooner the better, before the cracks in the system become too big for putty.

    Common sense needs more than a nudge here. BLOGGERS let's blog the boardrooms into common sense with a little persuasion.

  • http://pacificgatepost.blogspot.com/ PacificGatePost

    … one of my favorite topics.

    Terrific, the blogging world keeps improving. Some of the quality is terrific. Keep pointing to the good stuff.

    So here's a challenge:

    CONTROL in Britain's and America's boardrooms has shifted for the worse over the past 30 years. As a result, due diligence and oversight are out the window. We are now enjoying the results of this self-serving governance.
    Instead of lauding adulation on CEO's, how about pressing for restructure of their boards of directors. All of them.

    "WE THE SHAREHOLDERS OF YOUR COMPANIES…… >>

    http://pacificgatepost.blogspot.com/2008/03/board

    The sooner the better, before the cracks in the system become too big for putty.

    Common sense needs more than a nudge here. BLOGGERS let's blog the boardrooms into common sense with a little persuasion.

  • http://pacificgatepost.blogspot.com/ PacificGatePost

    … one of my favorite topics.

    The blogging world keeps improving. Some of the quality is terrific. Keep pointing to the good stuff.

    So here's a challenge:

    CONTROL in Britain's and America's boardrooms has shifted for the worse over the past 30 years. As a result, due diligence and oversight are out the window. We are now enjoying the results of this self-serving governance.
    Instead of lauding adulation on CEO's, how about pressing for restructure of their boards of directors. All of them.

    “WE THE SHAREHOLDERS OF YOUR COMPANIES…… >>

    
http://pacificgatepost.blogspot.com/2008/03/board

    The sooner the better, before the cracks in the system become too big for putty.

    Common sense needs more than a nudge here. BLOGGERS let's blog the boardrooms into common sense with a little persuasion.

  • D. C. Toedt

    Brad, your CEO hit the nail on the head about the need to announce it when he's thinking out loud at a board meeting. My experience has been that outside board members are much happier when executives label their information as fact, projection, conjecture, speculation, etc. It helps the listeners assign the information they're getting into the proper pigeonholes. It also gives the speaker an appearance of competence, certainly something you want when talking to your board.

  • jeff nolan

    It's been my experience that board meetings in general, closed and open components, only work when 1) people respect each other, 2) board members don't ask questions or make statements just to make themselves look smart, and 3) there is a shared sense of purpose. With these condition met, the closed session works as you describe. On a related note, I enjoy the board meetings I am in with you and I learn a lot from the interaction.

  • Ben Casnocha

    Fantastic post because it perfectly captures the old line, "The biggest problem with communication is the illusion that it's happened."

  • http://intensedebate.com/people/aziz_griese5636 aziz_griese5636

    Brad, more of these please. This topic is rarely discussed and the experience and insight is valuable to me.

    After reading the post, I thought immediately of the book, "it's lonely at the top", from your description of events and personal feelings.

    The CEO of a growing startup has a tough job. They are expected to lead the board meetings smoothly, so everyone is clear, but when he's in meetings with his core team out in the trenches, he has to let solutions be produced organically.

    Bluster Vs. Reason, Confidence Vs. Fear, Directing Vs. Following: there's a differently balanced mixture for every time and place. That's either the smartest thing I've ever wrote, or the dumbest. :)

  • http://intensedebate.com/people/todd_vernon84 todd_vernon84

    I hate phone based board meetings. For me, they are next to useless.

    I also believe if you want to explore new frontiers, do it with Board Members one on one, then capstone it in the Board Meeting, or present it as N possible cases that capture everyones individual positions that you gathered by talking to them.

  • PacificGatePost

    … one of my favorite topics.

    The blogging world keeps improving. Some of the quality is terrific. Keep pointing to the good stuff.

    So here's a challenge:

    CONTROL in Britain's and America's boardrooms has shifted for the worse over the past 30 years. As a result, due diligence and oversight are out the window. We are now enjoying the results of this self-serving governance.
    Instead of lauding adulation on CEO's, how about pressing for restructure of their boards of directors. All of them.

    "WE THE SHAREHOLDERS OF YOUR COMPANIES…… >>

    http://pacificgatepost.blogspot.com/2008/03/board

    The sooner the better, before the cracks in the system become too big for putty.

    Common sense needs more than a nudge here. BLOGGERS let's blog the boardrooms into common sense with a little persuasion.

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  • MariannaLeBourge

    Salut tout le monde! Je suis Lyonnaise .
    J’aure une question a vous demander.
    C’est quoi le mieux
    viagra,cialis,kamagra,levitra,propecia???
    Parce que je voudrais acheter pour mon cheri,mais je sais pas quoi choisir…
    Et encore,est que
    quelque’un sait une bon pharma on-line pour acheter les medicaments pas chere???

    Merci a tout les monde pour vos reponse, et
    a plus ! ! !
    P.S.
    Desole si je poste sur les mauvaise forum (topic) !

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