You have recruited a strong board of directors that is rich in experience and expertise. How do you make the most of this assembled talent to benefit your company? The answer lies in establishing lines of communication and conducting effective board meetings.
Many times, business owners take a laissez-faire approach to board meetings with the intention to allow for open discussion and free flow of ideas. However, this tactic can lead to unfocused, chaotic meetings during which nothing gets accomplished. How can you solicit meaningful board participation and avoid a free-for-all? Consider these three factors as you continue to develop your own board meeting style.
- Timing. Avoid dumping information on board members right before a board meeting. Most will not have the chance to fully digest the information and effectively participate in board discussion. Remember that most of your board members are not involved with your company’s daily operations. They will need time to reacquaint themselves with your company’s critical issues. Distribute board packages at least two to three days before the meeting. Or, provide key information to board members periodically between meetings.
- Balance. Strike a balance between presentation of information and discussion/decision making. There is no one rule of thumb for the best allocation of board meeting time. However, sharing information with board members on a regular basis between meetings will allow you to spend less time on presentation and increase time devoted to discussion of key issues. Not every meeting will be identical. But if you find yourself talking more than listening, you may have wasted the opportunity to glean valuable wisdom from your board members.
- Planning. Developing a plan for each of your board meetings is an obvious requirement for effective meetings. However, it is equally important to develop an overall strategy for your board agenda a year in advance. This is a chance to disengage from daily operations and objectively assess performance. Are you executing? Are you innovating? Are you building a management team? Are you growing the customer base? Are you doing so according to the last plan you laid out? And is that plan still good enough to win or do you need a new plan and new targets? The answers to these questions should naturally trigger a board agenda for the year ahead.
Planning ahead and being intentional with the content of your board meetings is a win-win for you and your board. It will make for a valuable exchange of information and provide meaningful engagement for everyone involved.
To learn more about launching and managing an effective board, stay tuned to Working Capital for the third installment of our series on private company boards.
Looking for professional help determining whether your company is structured for success? RKL offers a wide range of resources and expertise in the areas of strategic planning, succession planning, benchmarking, mergers and acquisitions and more. Contact Paula K. Barrett, CPA/ABV, CVA, partner and leader of RKL’s Business Consulting Services Group, at email@example.com or 610.376.1595.
Contributed by Gretchen G. Naso, CVA, MBA, a principal in RKL’s Business Consulting Services Group. A Certified Valuation Analyst, Gretchen has extensive experience in general and family limited partnerships and valuations for financial reporting, purchase price allocation and gifting and estate tax purposes.