Does your business hold board meetings? Do you think they are a bit pointless? After all, your management team regularly catch up and therefore know what is going on in the business at any given time. If your business is about to go through a private equity transaction then the board meetings will be a future requirement – but there’s a good chance you see this as a little more than a mechanism for reporting to the investor.
If this is the case then you are missing an opportunity. The board meeting creates the space for you and/or the management team to lift your heads from the day to day operational issues and focus on a more forward looking strategic agenda.
So how do you make the board meeting a dynamic forward looking decision making forum? Here are a few tips you should consider;
Fail to Prepare, prepare to fail
The best board meetings are when your team create the time beforehand to consider the issues, and the possible solutions, that need to be discussed. A lack of preparation will mean the quality of the discussion and the scope to make good decisions will be limited.
A strategic board meeting pack
A series of functional reports from finance, sales and operations summarising the short-term issues faced by each department will not give you strategic direction. The ideal board pack should highlight the challenges being faced, how they could impact the growth plan and ideas on how they could be overcome. Additionally, each report should draw attention to new opportunities for growth and how these might be exploited.
A dynamic board meeting agenda for dynamic decision-making
The agenda for each meeting should vary according to what is happening in your business. For example if the financial performance is in line or ahead of budget then there is no need to spend time discussing the numbers. Instead the board should shine a light on either areas of underperformance or opportunity. Your executive team should set the agenda. An agenda that is static month after month makes for stale and unproductive meetings.
A board meeting, not the CEO show
Each executive member of the board is responsible for their own functional area but must also be willing and able to contribute to other areas. The CEO is the leader of the business but he or she should not dominate the board meeting. This collaborative approach will offer different perspectives and ensure you get a better quality discussion.
How long should a Board meeting last?
A good board meeting finishes within 3 hours. You make this possible with a focused and relevant agenda. Be disciplined about the time a board meeting is allowed and you remove the temptation to discuss issues that warrant little or no attention.
The role of the non-executive director
Many growth businesses founded by an executive team will often have limited experience outside of their current roles. High performing boards have an external perspective supplied by one or more non executives. The right non-executive will have experience of numerous other situations and broad expertise. Often this means the non-executive will have worked through and dealt with many of the issues a business is likely to face.
Management teams that successfully execute against a medium term strategic plan will inevitably increase business value – benefitting all shareholders. Board meetings, if well prepared for and run properly, will be a key part of monitoring and refining the strategic direction of the business.