This is a guest blog post and is being posted with permission from Passageways.
Ineffective board meetings, a problem that far too many companies experience, are a liability to the future financial efficacy of your company–on top of being a waste of critical time and personnel resources. According to the The Harvard Business Review, 65% of top leadership meetings are not called for the purpose of making a decision, but rather as “group discussions,” (based on a survey investigating how top management in businesses worth over $1 billion used their time). They find only 12% of executives felt that their top management meetings consistently produced decisions on important strategic or organizational issues—and if they make a decision, they have a hard time of getting it to stick.
There are two overlooked ways to transform your meetings from ineffective to effective.
One: Board meetings should be decision-making sessions, not reporting sessions (you should already be utilizing a consent agenda for basic reports).
Two: Once you create an agenda—you need to follow it.
To help facilitate this, we have created a minute-by-minute guide to creating an effective board meeting.
2 Weeks Before the Meeting:
Determine long-term issues that need to be brought before the board: approval of the annual financial plan, the product roadmap, a briefing on a major partnership, the new product launch, an acquisition, an international launch or a new marketing initiative, are just a few issues that impact the long-term value of your company and need to be viewed and voted upon by the board of directors.
Create an agenda: Have the executive board secretary draft an agenda based upon the list of pressing issues relevant to the long-term value of the company. Review and revise the agenda.
1 Week Before the Meeting:
Create the Board Book: Use the agenda as a table of contents for your board book. Gather the reports and information you want to distribute in your board book so your directors can be prepared before the meeting starts. Since paper board books are cumbersome and a pain to assemble, we suggest switching to cloud-based board books, known as board portals, which can further streamline the process of properly informing your board before a meeting.
3 Days Before:
Distribute the board book, through the cloud or find a postman, with a cover letter explaining what you will be discussing and what decisions will need to be made. This will cement the purpose and strategy of the meeting; what needs to be discussed and decided upon. A board meeting is not a place for reports, it is a place for making actionable decisions about the strategy of the company.
Don’t forget to remind the secretary to order good food for the meeting. Hungry – hunger-induced crankiness – board members are not effective board members.
Day of Meeting:
Write and finalize your one page summary to the board. We suggest using a “Red/yellow/green” format which gives your board a sense of urgency and context to the decisions being made.
During the Meeting:
12:50 pm 10-minutes before: Greet the board members as they arrive.
1:00 pm – 30 minutes: CEO gives a 1-page summary of the purpose of and goal for the meeting, following the “Red/yellow/green” format.
1:30 pm – 30 minutes: CFO or management team gives a summary of functional and financial updates. Since your board book contains this information, this portion of the meeting should act as an opportunity to discuss the organizations strategic initiatives and the companies goals.
2:00 pm – 1 hour: CEO invites members of the management team to discuss one or two issues that are the focus of the meeting. After the discussion, the CEO frames the issue, presents recommendations, asks for board guidance. After a decision is made, non-executive staff should be excused.
3:00 pm – 30 minutes: After the main meeting has concluded, the board should hold an executive session. Executive sessions should be used to foster communication between members, offering feedback to the chief executive that may be inappropriate in front of staff, and discuss sensitive information such as pending retirements.
The Day After
Distribute the minutes amongst the board, provide any follow up materials that were requested and hit the ground running on strategic initiatives and decisions that were made.
In Conclusion
While making a board meeting effective may seem similar to herding cats, with proper preparation and a strict adherence to your agenda, your board meetings will be more effective and reduce potential liability to your company. By following these steps, future board meetings will serve a valuable purpose–and be much more pleasant for all those in attendance.