Why is it that some board meetings are uplifting and highly effective and
others such dreary, frustrating experiences? In private equity and venture
capital, we are very fortunate in seeing the whole spectrum of approaches to
boards. When I first started to work with dysfunctional boards many years ago,
each situation felt quite different – and of course they were – but combining
these experiences with those associated with high-performing boards helped me
identify some familiar patterns.
One day, helping a chairman to get a grip on the many challenges he was
facing in managing his board and his meetings with them, I drew two triangles to
try and simplify things a little. In the corners of one triangle, to help us
focus on the big problems, I wrote the words ‘purpose’, ‘people’ and ‘process’;
in the second triangle, which was about improving his board meetings, I put
‘before’, ‘during’ and ‘after’.
Clarity of purpose
It’s pretty tricky to have a good board meeting if the purpose of the board
itself isn’t clear, or if everyone has a slightly different idea of what their
own role is. We live in an imperfect world where things change so quickly that
there are almost always people and process issues in a business – even the
When it comes to meetings, the best board members will put a lot of effort
into the preparation and view a board meeting as an important event – one in
which they don’t just slump back and wait for it all to be over. They
concentrate hard and participate fully, making sure that the follow-through
communication and the execution of the board’s decisions is as it should be.
So what is the point of the board and what should the board focus its time
on? For me, the ‘right strategy, right resources, and keep out of jail’ approach
Ensuring that the right strategy is in place, that it is being executed and
that there are good processes for developing and monitoring it is clearly a
fundamental role of the board. Making sure, then, that the right resources are
in place to achieve the strategy is critical. ‘Keep out of jail’ simply refers
to all the governance stuff, which with a really good FD is generally
Top of the table
The next and probably most important ingredient is the chairman. As leader of
the boardroom team, they play a central role and not just during the meeting.
The masters of the chairman’s art usually combine excellent judgment with superb
interpersonal skills. They possess finely tuned antennae to help them sense when
something needs exploring further, or when they need to help a ‘silent seether’
say what needs to be said without ruining the meeting. They also know when it’s
best not to rush a decision and how to ensure that the agendas for the year
allow enough time to focus on the five or six things that really are the most
important. Underpinning the ability to do all these things is a talent for
filling in the thought bubbles above each of their colleagues’ heads. It is
probably this that enables them to change the pace or lighten the mood at just
the right moment in the meeting.
Two other very important people, and ones who all too frequently get left out
of the corporate governance debate, are the chief executive and the finance
director. How they manage their airtime in the board meeting is key to cohesion.
Ideally, you want execs and non-executive directors (NEDs) to work as a single
team with a healthy degree of challenge and support, and to avoid either putting
on a show for the NEDs or a divisive ‘us and them’ feel to meetings.
The best CEOs use their boards really well and seldom feel that board
meetings are simply something to get through to keep the chairman happy. It can
be hard for a CEO, though, when they are used to chairing most meetings and
their views being the weightiest in the room. Mindset is therefore very
important in setting the tone of the meeting. CEOs who are NEDs themselves often
say that they find it helps them a lot in managing the way they interact with
their own NEDs.
Finance directors have different challenges – for example, escaping their
functional role and being a truly complete board member. If they use up all
their airtime on the numbers and answering questions, they can find it hard to
get involved in more strategic matters. NEDs are critically dependent upon the
quality of the FD on their board. Those who are former FDs and keen to display
their technical prowess can also be a source of friction. Smart FDs avoid this
problem by regularly seeking their advice before meetings and then giving them
opportunities to shine in the meeting.
When it comes to NEDs, expectations are so much higher these days, as are the
risks. There are some excellent people available. The best know they will have a
lot more influence over the execs if they come from the perspective of adding
value rather than minimising risk or finding fault. They recognise that it is
hard to influence someone if they don’t respect you and accordingly invest the
time and effort in building respect.
Clarity of purpose, the right boardroom team and good, clear,
non-bureaucratic process make the best boards zing along. However, the best
chairmen know that they have to keep adapting and most of all keep thinking
about how they can maximise the effectiveness of their boardroom team.
Patrick Dunne is the author of ‘Running Board Meetings’, published last month
by Kogan Page, £14.99
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