How startup CEOs lead great board meetings that drive results - Technical.ly Baltimore

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How startup CEOs lead great board meetings that drive results

Squadra Director of Portfolio Operations Margaret Roth Falzon offers tactical tips and pro moves to make board meetings successful.

Instant Teams' board meeting, July 2021.

(Courtesy photo)

This is a guest post by Margaret Roth Falzon, director of portfolio operations at Baltimore-based VC firm Squadra. It originally appeared on the Squadra Blog, and was reprinted with permission.
The purpose of the board meeting is to provide the three-month view on the 12-month plan into the 36-month journey.

When done well, a board meeting rolls a leadership team up out of the day-to-day, and aligns them through critical and realistic synthesis of performance metrics that connect all aspects of the business around the same viewpoint on current success.

It is then the CEO’s responsibility to explain and analyze significant events and significant learnings, and get the board’s advice, buy-in, and support on any changes, reinforcements, or accelerators to the company’s strategic plan. The following guide contains the critical factors necessary to get the most out of your startup’s board meetings and drive the results you need to grow your business.

Structure

Board meetings are meant to be a dialogue. The best board meetings are when the metrics and governance are tight and more time can be spent on strategy and discussion.

The board meeting should be a ratio of:

  • 20% on the last quarter
  • 10% on updated projections of the next 12 months
  • 60% on deep discussion on the upcoming quarter
  • 10%  on how actions in the upcoming quarter drive the next six to 12 months

It should be delivered in three different modes:

  • The CEO should provide the synthesized data of the last quarter
  • The CEO should narrate an overview of the insights from the synthesized data for the board members
  • The CEO should analyze and propose strategic decisions for the next three months
  • The Board should discuss, with an intention to debate, enhance, counter, elevate, or accelerate the CEO’s thinking

Preparation

Start working on your deck a minimum of two weeks before the board meeting. Not because you really shouldn’t be procrastinating on this, but because it takes that long for you to critically and strategically process and decide what the most important information is that you want to have a discussion around. This is the difference between the time being a status report or a strategic meeting.

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Get the deck out at least 48 hours in advance so that the board members can already have a handle on the KPIs, financial statements, and general metrics of each function of the business. This will eliminate the need to read directly from the slides and drive discussion in the board meeting rather than information intake.

Delivery

The slide order is the window for the CEO to set the tempo and steer how the information will be processed by the board members. It sets the flow for the conversation.

Start with the baseline from the previous board meeting, including any KPIs, actions, or metrics you committed to and tell how you did based on the last information that the board saw. This allows the group to immediately get on the same page and to evaluate the success of its execution on the plan.

Then, as a general outline:

  • Move into alignment by reviewing the mission, vision, and values of the business
  • Launch into the review of the quarter by sharing highs and lows across the business to get issues out on the table from the get-go
  • Immediately follow with an overview of the financials to put everything else you will discuss in context

Design

There are a few misconceptions that can make CEOs go wrong in designing and managing their board meetings. Here’s a few:

  • They give everything equal weight. If things are going great in marketing and the pipeline has massively increased this last quarter, but there’s lots of problems and decisions to be made on which partnerships to pursue, don’t spend the same amount of time on them. If there’s not a lot to update on a particular function, hit fast-forward, spend the time where the decision-making and counsel is needed.
  • They miss bringing all the pieces of the company together. In preparation for the board meeting, often the CEO has gone to each individual business leader and has them focus on their function in their slides. Then the CEO copies and pastes it into a board deck without actually synthesizing them all together. For example, if a particular function of the business is briefing on future course changes — additional investment in engineering expenses, or projected increase in conference generated leads from sales — but they are not reflected across other functions — budget updates for that engineering spend briefed from finance, or increased ad spend in marketing — it demonstrates a lack of synthesis of the whole picture by the CEO. This causes confusion and can derail the whole meeting.
  • They give every business function its own deep dive. If nothing has deviated from the plan, or there were no major changes and the function is seeing success, taking a deep dive is unnecessary. A deep dive is for discussion not briefing.
Five women sitting around a conference table while one woman presents

The board meeting is the window to identify and discuss ways to change and improve the business. (Photo by Pexels user Christina Morillo, used via a Creative Commons license)

Futurecasting

Providing alternative scenarios even if you don’t currently have the cash flow or projections to achieve them is an okay thing to do! This is a discussion that starts with, “If we wanted to be more aggressive, here’s what we would do and why.”

The board meeting is the window to identify and discuss ways to change and improve the business by maximizing value or capitalizing opportunistically towards the big vision.

For example, when discussing your next hires, this is your opportunity to advocate for going big, and thinking about a new hire as a cost vs. a new hire as an investment. If the $300K person changes the game, and the $150K hire keeps playing the same game, that difference could transform our trajectory or stagnate the business. Evaluating this what-if scenario together as a board could drive unexpected but powerful action.

Fundraising

While you will not discuss fundraising at length in every board meeting, you should acknowledge how you are currently thinking about it.

When bringing up fundraising, your goal is to translate and define why the application of money will produce results and explicitly what results you aim to achieve.

To illustrate the impact of funds:

  • Show what the business would look like in 3 years with the injection of capital
  • Map investments to outcomes at a specific level — for example, investments in marketing spend lead to X increase in pipeline
  • Identify and discuss specific examples of, if you wanted to be more aggressive, here’s what you would do, and why
  • Include well-thought-out financial models to support each of your scenarios

Expectations

If the board members are informed regularly and kept in the loop during the quarter, nothing in the board meeting should come as a surprise.

Good boards are collaborative with the CEO. They are an extension of your team, and if engaged and activated properly can drive tremendous value, or feel like a tremendous time suck. If it’s ever the latter it’s on you as the CEO not them as the board member to change the relationship — whether it’s culture or process.

Pro moves

Touch base with your board chairman, lead investor, or an advisor in advance. Use this pre-board meeting as an opportunity to get a second opinion and as a sounding board to test how things are going to be perceived in advance.

There is nothing wrong with admitting you are not ready yet for something — the best policy is always to be honest and upfront. And if that means rescheduling the board meeting, take the heat and do it. It’s better to reschedule than not be prepared.

Don’t blindside the board during the meeting. The board should be notified of all urgent matters through appropriate communication channels prior to the meeting in real time as they occur.

You can always say, “I don’t know, let me get back to you on that.” But when you say this you must follow through.

Get your board meetings scheduled as far in advance as possible, preferably at the beginning of your fiscal year. This holds everyone accountable to making sure they happen.

Holding four board meetings a year, one a quarter, is the minimum expectation for the number of board meetings you will hold per year as an early stage company. You can always meet more frequently or call a special session to get advice and support on a situation at any time. Your board is your team.

After the board meeting, take a selection of slides and make an investor update deck. Write a note giving a recap of the meeting, highlight significant KPIs or discussion points, identify three things you could use support on and send an update to your investors immediately. This is the easiest time to get this often procrastinated responsibility off your list!

The board meeting decks are the artifact that tracks the progress of your company’s growth and maturity. Because of this, they become a critical part of any future due diligence for funding and acquisition that your company will go through. Treat them accordingly.

With all of the advice and templates out there, remember to make the board meeting your own. It has to be authentic and real to you as the CEO and your company. All in, the board is an extension of your team — make it work for you, make it work together and make the output of the board meeting serve and accelerate your company.

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Companies: Squadra Ventures
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