Most Board Management Skills are Just Plain Management Skills, Applied to a Board
Managing your board is a concept that comes up a lot in the startup sphere, and it might better be called working effectively with your board. The skills that are typically needed to manage a board are not that different from the skills that are needed to manage your employees. If you’re good at communicating, good at dealing with bold personalities that challenge you, and good at setting expectations with employees, then managing your board will be easier.
Selecting Your Board
Let’s start at the beginning. What’s one of the easiest ways to manage your board? Select a group of people to be on your board that you're confident you can work well with. While you won’t always be able to choose your board later on when you take outside money, in your company’s infancy you’ll be able to control who you select for your board. You should choose carefully; otherwise, you may find yourself stuck with a board full of personalities that are difficult to work with.
Know that there will also be personal dynamics with the board like with any group, no matter who you select. Does that one guy always disagree with any suggested course of action that you bring to the table? Does that other person always agree with everything you say, even if it leads to disaster, because they don’t really have the time to commit to thinking deeply about your company’s issues? The personalities of people will come into play. Board members are not so different from any other person. They are human and come with their own quirks.
Get Aligned on Cadence
One key feature of well-managed boards: they and the company agree on the cadence that they’re going to talk and check-in with each other. If you’re the CEO and the board expects you to say hi every month even if nothing’s going on, while you expect to talk once a year at the annual board meeting, then you’re off by a factor of 12. This is a recipe for potential conflict and disappointment. Make sure everyone’s on the same page for when, where, and how you’ll communicate.
Be Respectful of Time
Your board members are giving you the most valuable thing they have—their time. They’re invested in the success of your company and are taking the time to give the company feedback to improve (even if they do it through tough love). They’re usually connecting you to other people, spreading the word about your product in day-to-day interactions, and are generally your cheerleader and advisor in good times and hard times. They tend to do a lot for you and give you a lot of their time.
Always remember that your entire life revolves around just one company, whereas the board’s lives have many companies in them. Be respectful of people’s time. A concrete example would be NOT circulating slides or meeting agendas only 12 hours before your board meeting. Your board likely has commitments scheduled in those 12 hours and they can’t drop everything to read your slides.
Timing is also important. If you have bad news, waiting to tell them is generally poorly received. If you tell them there’s a problem and then say it’s been happening for 3 months and you’re just alerting them now and asking for their advice, they’ll likely be unhappy.
Avoid Shock Value
One of the main rules of a board meeting is that the Board should not be surprised or hearing anything for the first time at the meeting. If it’s minor news, they should’ve seen it in your agenda. If it’s major news, you hopefully met with them or called them individually ahead of time. This applies to good news (you negotiated a $10 million Manhattan office lease for a price of $5 million) or bad (your largest customer is leaving you for the competitor).
Know Best Practices
One of the most frequently asked questions by entrepreneurs is, “Do I have to have a certain number of meetings per year?” The question has more behind it: they are essentially asking if the law helps guide them as to how and when they should manage and interact with their board. There's no Delaware statutory requirement that specifically states number of required board meetings, so you’re on your own in terms of determining how many meetings to have per year. But the best practice is to at least have an annual meeting and often the corporation will elect or re-elect their officers during this meeting. Directors will often want to have additional meetings (perhaps quarterly meetings) to assist them in fulfilling their director duties.
Understand That Things Will Change
Although in the early stages of their company’s lifecycles founders often choose who’s on the board, in later stages, there may be people on the board that are there because they represent a VC that has invested a great deal of money. This brings us to the last point on boards: typically, the only constant for a board is change. You can expect it, and roll with it, and you’ll have learned one of the most important piece of board management!
A little trepidation when working with your board is understandable—especially if your board includes a highly respected advisor or an investor representative. But remember that they are all on your team, and they wouldn't be there if they didn't believe in and want to work towards the success of your company.
Fidelity can help manage all of your board activities. Learn more about how!
Sample scenarios are for illustrative purposes only.
Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.
Third party mentioned and Fidelity are not affiliated.