Digest: Board Efficiency
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Digest: Board Efficiency

Meeting Date
November 23, 2021
Event Type
Workshop
🇫🇷 / 🇺🇸
🇺🇸🇫🇷

Workshop with Jean-Phillipe Martin and Hubert Reynier from Visconti Partners on: How to make your board efficient and a strategic asset?

As founders, it can be hard to engage your board. There is a need to switch from being a CEO (Chief Executive Officer) to a C.E.O ⭐ (Chief Engagement Officer). This will allow you to fully leverage the strengths of the people you surround yourself with.

⭐
This format differs from our other events through its coaching approach made possible by Visconti's expertise.

👇 Here are the slides (in French), for those who missed the workshop:

Define the goals of your board

Your board is a : demanding and benevolent counter power for the leader. You want to have people who are better than you on the board.

The first step toward efficiency is to be aligned on the goals of your board.

For Visconti, as a leader, it's important to know the 4 main reasons for having a board:

  • Here to challenge on the performance and leadership
  • Having diversity in the voices of the board and their experience
  • Having solid ground for support during crisis
  • Sharing the visibility: having different ambassadors for the company

Set up your boards for success

For it to work, you board members need to be "skin in the game".

Planning is an important component of a well rounded board. You should plan your boards a year in advance and appoint topics to each instances. Rituals are your best friends.

The planning in advance is also contributing to making boards sacred.

💡
You can also separate key decisions like the vote for compensation of the key people. Having less members for special boards will make it smoother to vote. Having a separate compensation board is common among later stage startups.

Seeing your boards as assets

If needed (in case of crisis or key topics like M&A), don't be shy to use and gather your board. With today's flexibility thanks to video calls, you could even host a meeting per week untill the topic is dealt with.

During your board meetings

There are 2 sides:

  • The legal part (voting, showing the account of the company, the budget forecast).
  • The ground for discussion.

3 pillars of your board

You should distinguished:

1️⃣
FOR INFORMATION → Less important topics that your board member should be aware of in order to see the big picture of your company. Those elements can be in the appendix of your board pack.
2️⃣
FOR DISCUSSION → Strategic topics that you want you boards member's opinion (but you have somewhat of an idea on the subject). You are here to be a facilitator of the discussion in order to get the most value from you board members.
3️⃣
FOR DECISION → Strategic decisions that requires voting from the members.

Getting the most value out of your board

Here are some quick wins:

  • Send the board back in advance (at least a week) and ask you board member to read it thoroughly
  • In the body of the email, write a quick executive summary of what you expect of the session (bullet points and topics for 1️⃣, 2️⃣ and for 3️⃣.
  • After the meeting, send a digest of everything that was decided.

→ To make it more manageable, you could have a designated secretary for each session (a board member or your Chief of Staff for example). Being able to track the decisions made in order to start your next board on the decisions made on the previous one.

Depending on your organisation, you could be doing either only reporting during the boards or also on a monthly basis. In the ladder, you just need to go over the numbers quickly and from a big picture point of view. Don't waste time explaining things that the board is already (or should be) aware of.

Communicate with your team

Your COMEX should be kept in the loop. To do so, you should/could have a COMEX meeting pre-board to align everybody on what will pe presented during the board. They are the one who will execute the decisions so prepping with them is key for operationnal success.

More information about COMEX efficiency here.

Managing your board members

Be clear from the get go on your expectations for your board members. It will give a dynamic start for your board. Also, you can expose your expectations at the start of each meeting.

Dedicate a meeting to an "onboarding session" to present each member and their associated skills.

For your independant board member, you could take the time to explain to them what attitude you are expecting from them.

As a leader you shouldn’t see your boards as an obligation with low value. But rather an asset to challenge your strategy!

Who is in your board?

A seat on your board is not accessible to all your stakeholders. Because there is a limited number of seats, you have to set rules and choose between:

  • Some of your company's executives
  • Your Investors: VCs and BA's.
  • Independant board members.

For exemple, if you are planning to exit or acquire, you could switch a board member for someone with this key experience. It could be independent board member that has a lot of connection.

⛔
One issue that you might encounter: when your board (as a whole) proposes options but does not express its preferences. → If you are looking for your board to choose or give their opinion, you need to become a Chief Engaging Officer. → Be a facilitator, listen and challenge their answers → Talk less and let your board members confront themselves: it forces them to talk if you are a silent player in the discussion.

Kick-off your board with a code of conduct for board members. It could be led by (and should be) by a board member through a workshop to define the terms.

You can draw inspiration from the "3.3 Mettre en place une charte Codir". 🇫🇷

Alignment with your co-founders

This is why you should align with your co-founders about their place in this particular instance. Leadership topics should be carried by one "leader". Having too many voices can be more harmful than do good. Especially because there is a limited number of people that can have a seat at the board.

❓
Should you allow board observer to attend? Yes you could. BUT only if they bring value by being there like by working on a particular topic for showing to the board or by writing a "rapport d'étonnement". Passive board observer are not recommended.

One thing that could negatively impact your board is having too many discussion on the side with your board members. Try as much as possible to keep the big topics up for discussion during these moments. If not, you will dilute the appeal of working for the board for both you and the members.

😕
What if a board member is not engaged anymore? Meetup with them to understand where it's coming from. If it's not manageable, you should cut them off the board. Keep in mind that sometimes they are valuable in specific situations (like crisis).

Independant board members?

A independant board member is here to give value and another point of view (non-biased) on your strategic challenges. They are relevant as long as they provide value. Once they don't anymore, you should switch them out.

Choosing the right ones requires a balance of the following:

➕
➖
Neutral and impartial vision without concession/bias.
Reduced knowledge and understanding of the inner workings of the company.
Complementary skills and fresh new ideas.
Access to sensitive data and shareholder circle.
Extra network.
🗺️
You could do a mapping of the skills of your board members. It will allow you to see where there is a hole that could be filled by a independant board member!

5 key criteria:

  1. Expertise (added value in strategic decision-making)
  2. Experience and network (direct impact for the company)
  3. Independance (interests and free thinking)
  4. Availability (engagement and actions
  5. Diversity

When choosing your independant board members, please stay away from "rewards hunters". They should have another interest (apart from money) to be seated at your board. This will ensure that they

10 Commandments for board efficiency

  • The Boards must be planned over 12 months in a firm manner. This ensure to have every member available. The minimum number of session is 4 per year. 🔢
  • The duration of the Board must not exceed 3 to 4 hours. Do it in the morning rather than the afternoon. You can end it with a nice lunch. 🥗
  • A calendar of the Board's "red thread" themes must be established in order to structure the expected in-depth discussions and ensure the richness of the exchanges. 📅
January (Validation and post mortem of N-1 performance + Human Resources review, including C Level-Key men)
September (Risks, including Compliance)
June (Medium and long term strategy)
November (N+1 budget)
  • The board pack structure must be defined and remain consistent across the Boards + the agenda of the sessions must clearly distinguish the topics to be addressed: "for Information", "for Discussion", "for Decision". 💬
  • The documentation must be sent at least 5 days before the Board meeting, with an exec summary. Please ensure to share the impact of the coming boards with you teams. 👁
  • The number of members must be proportionate to the size and complexity of the activities. 👥
Startup/Scale-ups
SMEs
Minimum 3 is ideal
Between 5 and 7 for SMEs
  • Imperative need to have members with complementary skills and diversity. The presence of independent members (minimum 2 for bigger boards) will make the difference. 👩‍🔧👩‍💻👩‍💼
  • You should rotate the members of your board regularly to ensure a flow of new ideas. Maximum 6 years, ideally every 4 years. Keep in mind that board seats should be apraised for the % of ownership of your company by investors for example. 🔄
  • To host well rounded board sessions, you could appoint a secretary to handle the operational side (planning, preparation, drafting of minutes of meetings, etc...). 📜
  • As the "Chairman of the Board" your role is : facilitator of exchanges, contradictions, new ideas (NB: be careful, speak little and synthesizes and makes decisions after consultation with the stakeholders). ⚖
  • BONUS: Make your board evaluate itself. Never forget that your board is working for you. 👑

Useful Resources