In prior posts, I have discussed various topics related to corporate boards such as board recruitment, timing and compensation. But what if you have found yourself serving on your first corporate board? How will you know the steps for effective board meeting preparation? Not only will it help you, but preparation before and between board meetings directly impacts the effectiveness of the board. Your fiduciary responsibility as a board member is governance and providing value to the company’s shareholders, management team and other board members. Following are key tips regarding how to effectively prepare for a privately-held company board meeting –
Where to Start
A solid starting point in preparation is to study what the board is focusing on – its priorities. Thoroughly study the agenda and all pre-meeting materials provided to you. It is important to develop an understanding of what rights and decisions are reserved for the shareholders. Then, study the bylaws which are the decisions and rights reserved for the board directors. Lastly, study the authorization procedures which are reserved for management. All of this will help you understand the decisions the board is about to or is currently making.
The board agenda is typically set by the chairman or lead director and in concert with the CEO. It is also calibrated by the number of board meetings per year, the decisions that will need to be made and the communication that takes place between board meetings. You will find that most boards meet four times a year and will have conference calls in between those formal board meetings. The conference calls can be heavier in volume depending on what is occurring – such as an acquisition or divestiture.
In an earlier post, I discussed the definition of a healthy board culture. It is tantamount that you have a keen understanding of the board culture. Actually, boardroom culture is something that you should have thoroughly studied before accepting the board seat! A healthy board is the critical base for a board to be effective. Such things as open communication, collegiality and healthy debate are just a few items to consider. All in all, the board needs to be able to be effective and get things done, while keeping governance and value creation at the forefront.
Take the time to understand the logistical and technological aspects of the board meeting. Simple things such as whether your mobile phone or tablet should be on or off, could be an unnecessarily embarrassing faux pas later. Does the board use particular technology during the board meeting that you need to be aware of? If so, what is acceptable for you to access during the board meeting – your email, the web? Are there formal breaks during the meeting or is it ok for you to leave and return to the meeting should you need to? How do the presentations to the board work and who is doing what when? How long do the meetings typically run? You will find that board meetings start on time but they do not always end on time.
All this preparation may seem daunting at first, so do not try to go it alone. Your fellow board members are your colleagues. If it is a healthy board culture, they will be open and want you and the rest of the board to be successful, so draw upon them for help with preparation. Effective preparation for board meetings will not only mitigate future questions, such as the value or purpose of the board, but will help result in a truly rewarding experience.