THE BIG IDEA
The best CEO-board relationships are the ones where everyone is on the same team – the ones in which both CEOs and board members partner to take shared responsibility for growth, solve for challenges and mistakes, and celebrate successes. Our view the core role of a board is simple and essential: to partner with CEOs to get results – long-term profitable growth.
There are two operative words here: partner, and results. Effective board members have a partnership mindset. As partners, they are great compatriots and challengers to the CEOs they serve. They view the core of their role as being to develop a great relationship with their CEOs and making it their mission to help the CEO succeed – to drive results.
Read on to learn best practices for making the board your strongest ally and running board meetings that will unlock the full potential of your company.
KEY SUCCESS FACTORS:
- Invest time to get to know your board members and how they tick, and create a “partnership charter” with them;
- Keep your board informed and engage them outside board meetings to advance your strategic thinking;
- Get aligned with your board ahead of time on which business priorities are most important and what the desired outcomes of the board meeting are;
- Focus board meetings on discussion, debate, and decision-making on critical topics.
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PART 1. THE BOARD’S ROLE: PARTNERING TO DRIVE LONG-TERM PROFITABLE GROWTH
The board’s paramount objective is to partner with its CEO to drive long-term profitable growth. While this is a helpful simplifying idea, its not complete; so without further ado, here is our view on the key roles that great boards play in the lives of the CEOs they serve:
#1 – Keep the focus on the long-term. Great boards partner with the CEO to develop an ambitious growth agenda, and then keep them focused on the long-term vision, mission, and strategy. How do we build an enduring, winning business? Boards have the benefit of higher-altitude, “above the fray” perspective, which puts them in a unique position to engage the CEO’s brainpower on the right issues and priorities to drive long-term value. “A focus on the long-term puts everything into context for the short-term decisions… everything. We always, always look at the long-term, which helps us to do everything that’s right in the short-term.” ~Alan Mulally
Boards who keep the discussion focused on the long-term ask: What does winning look like? How are we progressing towards that vision? How is the world/industry changing, and how does our company’s vision and strategy fit into that picture? How do the things that we’re focused on this quarter propel us towards our long-term vision?
#2 – Ensure the company has the right team needed to achieve the long-term vision. Great boards should partner with CEOs to ensure the company has the right set of talent – both within the company and around the boardroom table – needed for the company to achieve its long-term vision. This includes observing, assessing, and coaching the CEO. The main job of a board leader is to make sure the management is right, and if it is not right, to fix it. Board leaders should also ensure that the board has experiential and intellectual diversity, and the right mix of expertise to help enable the success of the long-term vision.
Boards who ensure that the company has the right team ask: How well do the skills and talents of our leadership team map to the long-term needs? The current areas of focus? Who out there knows more about (stated strategic imperative) than we do, and how can we access and leverage their knowledge?
#3 – Guide and facilitate. While board members should have a perspective on key issues and decisions, their core role is to draw out insights, reservations, and differing perspectives from the leadership team in order to facilitate alignment and assist in plotting a course of action. There are situations in which the board should lead from the front – eg. in the case of a risky but potentially game-changing acquisition – but at their core, great boards guide and facilitate far more than they tell or do. As a practical rule-of-thumb, your board lead shouldn’t take up more than 20% of the airtime in the board meeting.
#4 – Challenge. Great boards help management look at issues and opportunities from different angles, and introduce new and fresh ways of thinking about these issues. They help expand and further the CEOs thinking on key issues and challenge them to rethink their assumptions. Additionally, boards have the courage to raise the most difficult questions, and a willingness to pursue them relentlessly until there are satisfactory answers – if the board doesn’t have this courage, it is less likely that hard or bold decisions will be made. A healthy and friendly tension of this sort between the board and CEO is appropriate and very valuable, and great CEOs appreciate this because they know it makes for higher quality decisions, and is done with the shared goal of finding the best path to long-term profitable growth.
Boards who challenge ask: How can we go bigger? Faster? How might we think differently about _____________? What if revenue growth had to be double what you’re forecasting – where would you find the additional revenue? What could make that possible?
#5 – Ensure commitment & accountability for the right things. Great boards get clear commitments from the CEO that advance the business towards its vision, and ensure follow-through on those commitments. They give the CEO the opportunity and accountability to deliver.
Boards who ensure accountability on the right things ask: What is most important right now? What action do we need to take right now to move towards (stated goal)? What can you commit to achieving? By when? How will we know? What resources are needed in order to ensure that that happens?
PART 2. THE CEO’S ROLE: GETTING THE MOST OUT OF YOUR BOARD
Most CEOs embrace the idea that building a strong relationship with your board is one of the CEOs most critical job functions; but as we know, a great relationship with your board won’t build itself. Just like all great relationships, a board/CEO relationship requires intentionality, proactiveness, and ongoing investment.
Apply these 4 strategies to build a great partnership with your board:
#1 – Get to Know Your Board Members. Boards are merely a collection of human beings, each with their own dreams, fears, strengths, and challenges. Take the initiative to get to know each board member personally. This is best done face-to-face until you have built a rapport that can be transferred comfortably to the phone. To begin, ask about their personal journey:
What makes you tick? How do you operate? What are the experiences that have shaped you? What are your hot buttons? What do you care most about in a relationship with a CEO? What’s something I could do that would upset you? What’s something I could do that would thrill you? What are your greatest challenges in your role, and what role can I play in easing those challenges? Take notes, and refer back to these regularly.
#2 – Create clear expectations. Create a mini charter with your board that creates alignment on the expectations of roles and rules of engagement. The agreement doesn’t need to be overly formal or lengthy, but can include such things as: How and how often will we communicate? What should we expect from one another? What types of issues can I call on you to help me think through between board meetings? A little bit of time up front can save lots of time, frustration, and confusion as you move ahead, so take the initiative and ensure that this happens.
#3 – Communicate. No surprises. Keep your board members informed, and allow them to stay up to speed without significant time needed. Periodic calls (scheduled and unscheduled) and short email updates about current events can help keep your board informed, make them feel connected to the action, and put them in a position to be up-to-speed when the next board meeting comes around. Importantly, boards hate surprises, so communicate bad news quickly (i.e. don’t wait for board meeting), transparently, and with a solution-orientation. Remember: You’re not alone, so seek input. When sharing bad news or issues, approach as: “Here is what happened: ______. Here are the implications: _______. Here is what we plan to do about it: _________. I’d really value your input on ________.”
#4 – Engage them! Don’t take for granted the expertise, access, and pattern recognition that your board brings to you. Find ways to engage their brainpower on the issues and opportunities where they can help you advance your own thinking. Proactively seek your boards counsel outside of the board meeting. Being a CEO can be lonely, and engaging your board in the right ways can provide CEOs a great source of guidance, support, and coaching.
PART 3. THE MAIN EVENT: THE BOARD MEETING
Running any meeting effectively is an art. Running a meeting where the stakes (and sometimes emotions) are higher still is an even finer art. Running effective board meetings takes intentionality, planning and practice – and a shared accountability between CEO and board for ensuring that the meetings are effective.
For CEOs, getting into the right mindset is perhaps the most important ingredient. CEOs should get grounded in confidence (you are the CEO, the board exists to support you, you have done your prep work well!); humility and an open mind (there is a great collection of human capital sitting around your board table; use it!); and the quality of their relationship and bond with each board member.
The board meeting in not about being judged or being right; it’s about being productive and successful. Remember that when you are challenged it is not personal; it is in service to the goal of the company’s long term success – and yours.
Ultimately, great board meetings should drive clarity, create alignment, ensure accountability and follow-through, and strengthen the bond and shared mission of the board and CEO. Above all else, great board meetings help advance the business towards its ultimate goal – long-term, profitable growth.
Here are some best practices for how CEOs and their executive teams can work with boards to make board meetings rock!
Before the Meeting
2-3 Weeks Before: Align on what’s most important. Great CEOs are in the habit of regularly asking themselves the question – What is most important right now? Approaching a board meeting, the CEO and board should both reflect on this question. Tip: Do this by zooming out and taking the long-term, 3-5 year perspective… what matters most through that lens?
Tactically, call each board member to see how they’re doing, understand their view on what the most critical few issues are, and get aligned on what’s most important. These conversations will form the basis for your meeting agenda. Be sure that the agenda items that you propose are strategic and ripe for decision… not highly executional or tactical.
The Week Before: Schedule some quality time pre-meeting. Wherever possible, coordinate a dinner/breakfast before your board meeting (which can include others from the executive team who won’t be in the meeting). This is a good opportunity to talk about the business casually in a light and social setting, and deepen the personal relationship with your partners on the board. You can begin to warm up the next day’s board conversation by saying, “[This issue] is on the agenda. This is my main concern at the moment and here is where I think we should come out on it. What do you think?”
4+ Days Before: Prepare and send board materials. Do so at least 5 business days ahead of time so that your board can do the prep work. The quality and the timeliness of the board deck has a significant impact on how productive and beneficial the board meeting will be. Prepping the board deck also forces the executive team to reflect on what is going on in the business and why.
Some quick-tips for a good board deck:
- The one-page test – in a one-page executive summary, you should be able to articulate how the business did against its agreed-to objectives the prior quarter, and priorities for the upcoming quarter. (Having only one page forces coherence and a focus on the must-knows. “If everything is important, than nothing is important.”)
- Frame a few questions for board members to think about as they are reading the board deck.
- Explain not only the what, but the why. Slides with numbers and variances without explanation on what drove the variance are unhelpful, and will require that too much in-person time be spent answering such questions.
- Be clear about the agreed to discussion topics (which you’ve pre-aligned on with your board), and what action/decision/outcome you want from each topic. Provide enough background (including framing, analysis, etc.) for the board to come in well-versed on the issue and ready to engage.
- No bonus points for a long or pretty deck! Shorter and more to-the-point is better. Give just enough for the board to “get it” without extensive elaboration.
During the Meeting
#1 – Start with intention – what does success look like in this meeting? A universal meeting best practice. Beginning with the end in mind, share with the board your view of what success looks like in this meeting. For me, the golden outcome of this meeting is _______. I’m hoping to come out of this meeting with alignment on [insert key decisions, issues, discussion topics]. Ensure that you’ve clarified what roles you want the people in the room to play so that that outcome comes true. “Greg, when we get to the discussion on the decision we need to make on the acquisition target, I’d love for you to play the role of red hat to pressure test our thesis given you have such an analytical way of thinking.”
#2 – Keep the business updates short and focused. The last thing you want to do with a room full of talented people ready to help solve problems is read powerpoint slides to them. The meeting should not sound like a book report, and should not review material already explained in the board deck. Sitting at the table among the board, succinctly summarize the quarter, and ensure that your short recap hits on they key commitments made last quarter – Here are the three things you should know about the prior quarter. Here’s what we committed, and here’s where we landed on those things. Ask if any members have questions from their review of the materials.
#3 – Keep the discussion focused on what’s most important. The majority of the meeting should be focused on the key discussion topics you aligned with your board on ahead of time. You know that by now, but the “how” is important here. In these discussions, create an environment and tone that actively solicits independent thinking and alternate points of view from your board so that the board can serve its purpose of helping the CEO to identify the best path forward. (eg. “Greg, can you take the other side of my recommendation to ensure that we’ve considered this from all angles?”) Encourage respectful debate to dig deep on difficult issues, and create space to disagree without being disagreeable. And remember the importance, as a CEO, of balancing confidence and humility. “Here is what I think and why…. But I’m open to being convinced otherwise so that we can get to the best possible path forward!”
#4 – Capture all agreements, decisions, commitments. Ensure that you arrive at specific, actionable, and clearly articulated decisions/commitments. This ensures that everyone – board, CEO, and execs – are on the same page. Here is where we’ve landed on the key discussion topics / decisions. Is anyone unclear about these? Can everyone commit to where we ended up? Pro-Tip: Write these takeaways on the whiteboard to test and confirm everyone’s understanding and alignment.
After the Meeting
#1 – Send a short recap email. Include your recap of: (1) major takeaways from the meeting, (2) what the board aligned on as being the top priorities for the coming quarter, (3) any commitments made by the CEO, and (4) key decisions. Include summary notes, and the updated draft of your one-page plan, which should serve as the single source of truth for each of the above. Use this email to offer appreciation, which will help to train your board as to the types of approaches/behaviors you found to be the most valuable. eg. “Greg, I thought it was really helpful when you pushed us to consider how else we might improve our conversion rate. It unlocked some great new thinking, and is the type of challenging that I value from the board. So keep it coming!”
#3 – Do a quick after-action-review with your board lead. A few days post-meeting, call your board lead. How did the meeting go? Was it the conversation you were expecting to have? Is either party unclear on anything? Is there anything we can learn from this board meeting to help make future board meetings even more productive?
SUMMARY OF MOST PROBLEMATIC BOARD MEETING PITFALLS
- Sending the board materials with too little lead time for the board to review thoroughly (remember, send 5+ days ahead of time).
- Spending too much time “reporting out,” reviewing past results.
- Trying to keep meetings cordial and affirming; instead of diving deeply into difficult issues. Great boards favor directness over decorum.
- Getting lost in the weeds when someone asks something like, “Can you give me a quick overview of where we are on the product launch?”
- Running out of time in the meeting without covering or recapping all key issues. CEO should actively manage the time, or appoint a designated time-keeper.
- Failing to recap. Testing for understanding and agreement on key decisions is critical to ensure that the board is on the same page.