How to setup a board meeting: Seneca.io's guide to best practice for board meetings
Every board is unique with different challenges but the same basic function – that of making sure the company is run successfully and in accordance with the various rules and regulations that apply to it. This can make preparing your board minutes and agendas a challenge as many items will seem unique, but there are still some features that all boards have in common.
So we’ve got together down at Seneca HQ to create best practice guides to help you make the most out of your board meetings (and maybe even bring a bit more joy into your day).
Here's our top-tips list to help your board reporting process...
Present your information in a timely manner
If you want your board to quickly address issues affecting the company and in particular any adverse trends, board information needs to be prepared in a timely manner. Sending out a hefty tome days before your board meeting makes light of such an important process, and as it is prepared some weeks in advance it may be out of date. It also makes it difficult for your board to digest the information and prepare for the meeting, or for the meeting to be conducted efficiently.
Draw upon your board’s experience
As CEO, you will know much more about your company than your board does, but it’s quite likely that your board will have more experience across a wider variety of companies and issues. Their diverse range of experiences and perspectives are critical to effective corporate governance and they will often be great with the 3,000ft view that is hard to attain when you are focusing on the day to day.
Agree a standard format, and stick to it
Too much information can potentially be distracting - resulting in meetings that are long and drawn out, likewise too little information could make it difficult for your board to fulfill their obligations. Agree to a standard format and stick to it. To get you started, here are our Top 10 subject headers that will cover many types of board reports:-
Governance Issues: Are there are Options to be issued, new senior hires, or exec remuneration issues?
Cash Position: Review your actual cashflow against forecast. Are sales and expenses in line with budget? What is your cash runway? Is the company solvent? If not, what is the plan – will sales increase or you raise money in time, as you need one. Beware of trading insolvently, which can cause personal liability to Directors!
Past Month/Quarters’ business highlights: This is where you highlight your operational targets and key performance indicators.
Past month/Quarters’ major issues/observations: Was any legal action taken against the company, or any that the company needs to take, including recovery of trade debtors? Are there other issues specific to the company such as patent or trademark contravention, any competition, new entrants to marketplace?
Technology / Product updates: Review your development time lines, problems and issues and note critical progress and exceptions.
Partner development: Direction of the deal and key issues. e.g. Has a Heads of Terms been agreed, does it need shareholder approval? Will it be a material contract (say >225% of revenues) if so what are the business risks associated with taking it on? Does it meet the strategic targets set for the business? How realistic is the deal? Will it be a springboard to future partnerships or suck all resources? Is pricing realistic?
Marketing, sales, PR: How effective is your marketing, conversion from leads, ROI? Is it meeting the strategic direction of the company? Look at your sales pipeline -how many leads do you need to generate to make a successful sale?
Financials: What is your cash position, cash runway. Look at your revenue – are debtor/creditor days increasing/falling? If so, why? Review EBITDA - do you need to re-forecast as a result of underperformance? Your month, quarter or 12 month forecast – are sales falling through to bottom line? What is your base breakeven target? Are you meeting any Shareholder, Investor or Bank covenants. Do you need to go out and fundraise? Angel/EIS/SEIS market? Strategic industry insider?
Blue sky: Product / market - big picture / strategy, get it out on the table for discussion
Summary: Goals for your next month or quarter, with key targets set out to be measured against at your next meeting.
You’ll get the best out of your board if you regularly seek feedback on the board’s performance. It’s an important opportunity to review how effective your meetings and reports are and whether they can be edited, improved or even condensed so that the information is consistently relevant. It could also highlight where training might be needed, or where you need to turn your attention to any organisational risk that is lurking around the table.
As shown, the challenge with board reporting is getting the balance right.
Ensure you provide the pertinent details relevant to the entire board’s needs on a timely basis, and with enough information so that all directors can adequately perform their duties (and of course being transparent about what you report). Get this right and the Board can add real value to you and your business.
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