Preparing CEO’s to run their first board meeting

Happy Friday! We’re back today with Lily Lyman of Underscore VC to talk about how early stage founders can get themselves -and their board- ready for their first board meeting. In case you missed it, last week we talked about Underscore’s approach to boards.

AB: Thank you for joining us, Lily. What are your favorite types of board meetings where the board can add the most value?

LL: My favorite board meetings are the ones where you dive into new opportunities, strategic trade offs, and team-related things they’re working through.

Founders should use their board as an asset. Something I think really important to note is that I will never pretend to know somebody's business better than they do. They're going to know it way better. 

But the advantage that investors or people who sit on a lot of boards can have is reps. They can see patterns across different stages of company building and different common pitfalls. I feel like our job as board members is often to ask questions versus provide answers.

The goal should be to try to pick one or two questions that help further the discussion or the team's thinking. The other piece for a board is to try to help the team anticipate things that could be coming around the corner that the executive team may not see yet or may see in a different way. And, board members should have that point of view because we’re seeing this multiple times. 

AB: A founder is getting ready for their first board meeting. What should they be keeping in mind to make best use of the time?

LL: I think the best board meetings walk through the materials that the CEO already sent, but they add color to it and give board members an opportunity to ask questions.

It’s important to make sure the board meeting isn’t just going through updates: I think unsuccessful board meetings are just people presenting and talking at the board the whole time. The reason why I think that's unsuccessful is because then the company's not getting value out of their board. Part of it should include discussing some strategic topics that you want to have a real conversation around.

AB: When you think of your most exemplary founders in terms of how they run their boards, what do they do better than other people in terms of how they run their board meetings?

LL: I give credit to Mike Greene and the Hi Marley team. They do an excellent job, and they have done so from the beginning.

The thing these people do well is they have a really clear articulation of how they want to measure their business: what are the metrics that matter, what are the goals, and a very clear demonstration of “here's what we said we were going to do and here's how we actually did.” 

It's okay to have a total miss, but what matters is the clarity of demonstrating your underlying point of view and what the right metrics are. As a founder, you (not somebody else) should decide these metrics and lead with them and be able to say ‘here's what I think matters to know how we are doing on these initiatives or goals.’ 

Then, you later want to share: here's what we said we were going to do, here’s what we did, here's what we learned, and here's what we're going to do going forward. The people who have the best grasp on how to measure their business and how to convey it do a really good job. 

Obviously at later stage there are more metrics and data than earlier stage. But even at the earlier stage, you can put in some leading hypotheses. 

Another best practice for board meetings is balancing the actual time between presentation and soliciting input and discussion. 

AB: What types of prep work should founders do before a board meeting? Should they be sharing any documentation in advance? 

LL: Before each board meeting, the CEO should be thinking about how they want to spend their time. They should be asking themselves what type of information they need to share prior to the board meeting to ensure they get the most out of the actual discussion and use of time.

I've often given founders a template of a board deck. I'm increasingly in favor of written board preparation, sort of a prose / narrative document — it can be five, ten pages — one of my companies is now over 30 pages, but there’s really good data in it. Some of the best companies I work with do this preparation. I think it allows for very clear articulation and thinking from the founder's point of view. And, it allows the board to digest it prior, and then everyone can show up well-prepared.

Materials should ideally be sent at least 48 hours in advance and definitely more than 24 hours in advance. You want to give people time to read it and set the expectation that there is a culture that people have read it before the meeting.

Note that if you end up also wanting to use a slide deck in the meeting, you can also do that. But that is not a replacement for the pre-read sent to board members in advance of the meeting.

AB: How should founders think about discussions about tough topics before a board meeting?

LL: I've been on boards where the CEO will get pre-alignment beforehand on the agenda topics. If there's any controversial topic or something that they're trying to get resolved from a governance perspective, sometimes I'll see them talk to individual board members beforehand.

I think that's generally a good practice because you can surface what is on board members’ minds and make sure you find commonalities. Or, if there's something that you don't want to go down a rabbit hole in the board meeting, you can address it in a separate forum. 

So, it may make sense for a CEO to meet one-on-one with board members prior to the meeting to say ‘here’s a topic I'd like to have a discussion on.’ These conversations also give the founder a way to read the room so they can know how to have a more productive conversation in the board meeting.

AB: Should the CEO be in the room for the full board meeting?

LL: In general, I think it can be a good practice where the CEO leaves for five minutes and the board members can have a conversation around what they think and heard. This is a time for them to discuss the big themes that stand out. I think this can be a nice way to make sure the board members all heard the same thing and had the same takeaways.

And then the CEO can come back at the end and the board can give them feedback based on their (quick) debrief. This allows the board to provide a succinct, prioritized piece of feedback to the CEO.

AB: How should the CEO think about follow up after the board meeting?

LL: The very best CEOs I see write a follow-up email after the board meeting. This email can summarize some of the key decisions made and points of discussion.

Sending this after-meeting email helps drive extreme clarity, which is one of our values at Underscore. And it shows that you, as a CEO, had some clear takeaways versus a rambling conversation.

AB: Any other thoughts on how a founder can best utilize their board?

LL: You should treat your board like an extended member of your team. Importantly, you should not be scared of your board.

For example, your board can help you open customer doors and close candidates. I spend a lot of time talking to candidates that my portfolio companies are trying to hire and telling them why we as investors got excited, why we put millions of dollars to work behind this company, and why they should be excited to take this as their next chapter of their career.

I think founders don't always realize they can use their people around the table in that capacity.  But it can be an asset.

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