Will Herman has an excellent post up titled Board Meetings – A CEO’s Point of View.  While I’ve never been on a board where Will was CEO, he and I have been on several boards together, and he’s an incredibly valuable and impactful board member.  His “top 11” list of suggestions is a must read for any CEO that has a board of directors.  Also – look for some new posts in the Board of Directors series that Jim Lejeal and I have been writing coming soon to a blog near you.

I go to a lot of board meetings.  As a result, I’ve reviewed a lot of board meeting minutes.  In general, the philosophy among most VC-backed companies – promulgated by the law firms for these companies – is to keep the board minutes “light.”  They should cover the substance of the meeting and have any specific votes, option grants, or board level issues documented, but they should not contain extensive details about the presentations giving in the board meeting.

I regularly get asked for “sample board meeting minutes”, especially among newly funded companies that are just starting to have board meetings and might not have their outside counsel present at the meeting (although most outside counsel’s that are credible and used to working with early stage companies will attend board meetings at no charge – just ask as part of your initial interview process with the firm – it’s very useful to them to be there so they can stay up to speed on what is happening at the company.)  Following is a template for a sample set of board meeting minutes.

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[INSERT NAME OF COMPANY]

MINUTES OF A MEETING OF THE BOARD OF DIRECTORS

[Insert Date of Board Meeting]

A meeting of the Board of Directors (the “Board”) of [Insert name of company], a [Insert state of incorporation] corporation (the “Company”), was held on [Insert date of board meeting] ([Insert time zone—i.e. Mountain Daylight Time]) at the offices of the Company.

Directors Present:

[Insert names of directors present]

Also Present Were:

[Insert names of other people (mgmt., etc.) present]

Directors Absent:

[Insert names of directors absent]

Counsel Present:

[Insert names of legal counsel present]

NOTE: It’s generally good to note next to the above listing if the attendee(s) participated via telephone (otherwise it’s assumed they participated in person at the above referenced location]

Call to Order

[Insert name of CEO or board chair] called the meeting to order at [Insert start time of meeting] ([Insert time zone—i.e. Mountain Daylight Time]) and [Insert name of secretary] recorded the minutes. A quorum of directors was present, and the meeting, having been duly convened, was ready to proceed with business.

CEO Report

[Insert name of CEO] reviewed the agenda and welcomed everyone to the meeting. Next, [Insert name of CEO] discussed the current status of the company and its progress. A number of questions were asked and extensive discussion ensued.

Sales & Business Development Update

[Insert name] next provided an update on the overall sales progress and sales pipeline of the Company. He also presented the status of business development discussions.

* [Insert name] joined the meeting*

Financial Review

[Insert name] provided a comprehensive update on the Company’s financial plan and forecast. [Insert name] also reviewed the Company’s principal financial operating metrics. Discussion ensued.

Financial Planning

The Board next discussed the timing and creation of the 2007 Operating Plan.

Approval of Option Grants

[Insert name] presented to the Board a list of proposed options to be granted to Company employees [and advisors], for approval, whereupon motion duly made, seconded and unanimously adopted, the option grants were approved as presented in Exhibit A.

Approval of Minutes

[Insert name] presented to the Board the minutes of the [insert date of previous board meeting] meeting of the Board for approval, whereupon motion duly made, seconded and unanimously adopted, the minutes were approved as presented.

*Management was excused from the meeting *

Closed Session

The Board next discussed a number of strategic topics. Questions were asked and answered.

Adjournment

There being no further business to come before the meeting, the meeting was adjourned at [Insert time of adjournment] ([Insert time zone—i.e. Mountain Daylight Time]).

Respectfully submitted,

____________________________

[Insert name of secretary], Recording Secretary

NOTE: Create (and delete) additional headings and sections above as necessary to capture the major agenda items of the board meeting.

NOTE: If attendees join after the meeting start time or leave before the meeting adjournment, it’s preferable to note when they join and leave the meeting as indicated above by the asterisked notations.

Following are some board meeting rules that were recently presented to me and my fellow board members by a CEO at one of his first board meetings at a newly funded early stage company.  I thought they were brilliant.  Feel free to pass them out at your next board meeting.

Be supportive of the company: Tell us the things we do right and things we do wrong.  We are figuring this out as we go.  “No comment” is hard to interpret and our imaginations will run wild.

Be responsive to communications: Please ACK emails.  If you can’t respond when you read, set expectations when you can.  At least say “ack.” I’m generally on email all the time and it’s a real-time communications tool for me.

Be transparent: We have personal relationships around the table.  Management should not use board members as “agents.”  I don’t want any politics on the board – if I did I would still be going to board meetings from my last company.

Be specific and descriptive: I sit on a board also.  I know the temptation to speak in strategic generalities.  Please include concrete examples that smaller minds can digest.  I give extra credit for using more words.

Look for opportunities: You generally cast a much larger net than we do.

Look for early revenue opportunities: Making money will never go out of style.  Generally everything is easier with revenue.

Look for partnerships (Panda Mating): Early stage companies need help with partnerships largely because we don’t have any of particular value yet (like people, brand, data, and money.)

Look for dead-ends: No one wants to hit the wall at 120mph.  You’re more experienced so you should see the wall coming before we do.  Don’t grab the wheel – just tell us to look down the road.

Scott Converse – the CEO of ClickCaster – has a long and very personal post about his experience in the run up to his first board meeting.  I’m sure he’ll have a follow up post after the meeting today.  If you are a first time entrepreneur who has just raised money, or are just starting to have board meetings, Scott’s perspective will be additive to your world view.

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.