Creating a Productive Board Meeting
My First Board Meeting
I was nervous and didn’t know what to expect when I attended my first board meeting. We had prepared a 100+ slide deck and everyone was well-rehearsed.
We managed to get through the whole deck within 2.5 hours. There wasn’t a single question from the Board. In fact, they only said about 10 words in total - “makes sense”, “great”, “good job”, etc. When we left the boardroom, the management team proceeded to give each other high fives and tell each other how great it went.
My initial reaction was different:
What did we just accomplish? All we did was present the same facts that were in the pre-read material…this meeting could have been an email.
The reason there were no questions/discussions is because there was no time! People were exhausted after 2.5 hours of presentation and just wanted to go home.
The board meeting was broken and unproductive.
Managing Your Board
The management team has to put in a lot of effort to extract maximum value from VCs and other board members and during a time of economic headwinds, this is critical.
The actual board meeting is just one part of successfully managing your board and getting real value from your board members. Below is a deep dive into the interactions you should be having with your board.
1. Investor Update
Depending on the company stage and how the company is doing, the CEO should be sending either a monthly or at least quarterly update to the board within 48 hours after the end of each period.
The update can be a quick email that covers the highlights:
Cash balance and cash runway
ARR growth
Churn
Notable new logos and churn
How sales pipeline is looking for the next quarter
Anything else significant worth calling out (limit to 2-3 items)
The board does not want to wait 3 weeks after the end of a quarter to hear that you missed sales targets by 50% and expect to miss next quarter by 50% as well. Don’t wait to update your board with bad news!
2. Investor Pre-Meetings
My number one rule for board meetings is no surprises. This doesn’t mean everything has to be completely vetted out and discussed before a board meeting, but you don’t want to present something potentially controversial for the first time in the meeting.
These meetings are separate meetings with each individual board member. On the company side, they would include the CEO and potentially another executive depending on the topic. For example, if you will be seeking approval of the annual plan in the board meeting then the CEO and CFO can meet with each board member individually to go through the plan.
3. Board Meeting Pre-Read Materials
Timing: Send the materials at least 48 hours in advance. If you are sending materials at midnight the night before then they don’t have a chance to review them before the meeting, which makes it much less productive.
Pre-read content: Most companies follow one of the below methods with regard to pre-read materials. Both options work, but I have a strong preference for option #2 because with a long-form narrative format the management can better convey the story.
Option 1: The pre-read material is the exact same as the board deck that is presented in the board meeting.
Option 2: The pre-read material is a long-form narrative (or more detailed deck) and what is presented is a condensed slide deck to help tee off discussion items.
Request for questions and comments: Ask your board to provide questions/comments on the pre-read materials before the meeting. Telling your board to provide questions ahead of time will do two things:
Helps make sure your board reads the materials in detail before the meeting
Gives the board time to ask the questions most important to them, which will help drive the board discussions.
4. The Board Meeting
CEO’s State of the Union
This is an opportunity for the CEO to review the state of the company at a high level. I like the below format for the first slide to guide most of this conversation.
Other areas that the CEO update can cover include:
Company’s top priorities for the quarter/year
Strategic learnings from the past quarter
Any changes to product or GTM strategy
After these high-level updates, the CEO (or could be the CFO) should present some of the north-star data/metrics to set the context for the meeting. For software companies, the two most important metrics are annual recurring revenue (“ARR”) and cash. At a minimum, you should present something like the below.
You can then add additional information based on their significance/focus for your company. And yes…. you can also add some pretty charts to display this information as well, but most board members also like to see the numbers.
Go-to-market (“GTM”) Update
Given the importance of sales growth for VC-backed software companies, a GTM update should be in every single board meeting. The focus of the GTM update will shift during different stages of the business though.
During the early phases of a company, new logo growth is king. But as the company builds a significant customer base then customer success (gross and net retention) becomes increasingly important. Similarly, if the company has faced pipeline problems then marketing might be a major focus.
Some items that should be considered in this update:
Previous quarter summary: Significant deals closed, why the company beat/missed plan, win/loss analysis, churn summary, etc. Remember to provide context!
Current quarter outlook: Current forecast vs plan, pipeline coverage, new channels, significant deals in the pipeline, customer churn risk, etc
General outlook: There are a lot of potentially interesting analyses that can be done to provide insight into how GTM is performing, the trend, and what it means for the future. Figure out what is most meaningful to your company and don’t be afraid to ask the board what they want to see.
Finance
Every board update should include a financial review. The focus and time spent on financial review will change at different stages of the company. Given the tough macro environment right now, the finance section should get more prominence right now than it has in the past.
At less than $3-5M in ARR, the only things that really matter are your sales growth (i.e. ARR) and your cash runway. The later stage you get the more important the financial review and related metrics become.
Other Executive Leader Updates
The executive team should get exposure to the board. The board likes to hear directly from the department leaders because they are the ones running their functions and are better equipped to engage in discussions.
However, if you let every executive present at every board meeting then it will quickly turn into a 5 hour, unproductive meeting. Not every area needs to be covered live at every meeting.
Decide what items are critical to discuss with the board at each meeting, but make sure you allow each leader to occasionally present.
Closed Session
This is where everyone except the CEO and board members is kicked out of the room so they can discuss more confidential items. The CFO may stick around for part of the closed session if equity or finance matters are being discussed.
What is discussed in this secretive meeting?
Approval of 409A valuation reports and employee equity grants
Review and feedback on executive team performance
Sensitive topics such as potential layoffs, bonus plan approvals, M&A, executive staff terminations, etc
6. After the Board Meeting
Board dinner: There are differing views on whether this should be before or after the board meeting. I don’t think the timing matters all that much, but it seems more relaxed and open when done after the board meeting.
Feedback request: Ask the board occasionally what went well and what could have gone better. Board members are in lots of board meetings, so they likely have some feedback on things other companies are presenting/discussing that they want to see.
Follow-up items: Summarize the action items from the board meeting so the management team can review and take appropriate action. As appropriate send the summary and responses to the board as well.
Working group sessions: Your board members *usually* want to help you, but some topics/discussions are best done outside of the full board meeting with a smaller group. Board members come from various backgrounds - operating, finance, previous founder, etc. Understand their expertise and create working groups with them to discuss strategic topics.
Other Thoughts
Context is critical: A board slide with only the most recent quarter’s numbers is not very helpful. Board members don’t remember the company plan, the historical numbers, or the details of your previous company objectives. They work with a lot of companies. Provide the relevant context in the board material so they know how to interpret the data.
No Surprises: This is why investor updates, pre-read materials, and pre-meetings are so important. Do not surprise board members in the meetings with a controversial topic.
More discussion less review: Dave Kellog has a great blog post on this topic. Like my first board meeting story, board meetings are frequently weighted way too heavily on reviewing the past and not on the future.
The reason I like detailed pre-reads is so the board meeting can be more focused on strategic topics and getting advice from your board members. I bet almost all companies would benefit by adding more discussion time vs review time in their board meetings.
Length of the Meeting: For most private companies, the answer is likely 1.5 - 2.5 hours. As complexity increases with agenda items such as M&A, fundraising, managing a tight cash runway, etc, the meeting might be on the longer side. Once you are public, board meetings always take longer because there is a lot more complexity and administrative matters.
Final Thoughts
Make your VCs and the board meetings a value add. Don’t view them as a checklist item to complete every quarter. If you manage your board correctly then there will be real value created.
Board preparation is a lot of work. Don’t make it wasted time.
Excellent post and one thing I would say broadly is less is more! 100 page board decks usually have less information than 20 because the 20 required distillation to all that happened in the quarter to the salient facts vs the 100 is just covering everything regardless of importance or changes.
Using this right now to prepare for a board meeting!
You should do a post on the slides you include within a finance section...your typical flow