How to Avoid the Types of Board Meetings that Suck Time, Resources and Engagement from Organizations
If you are like me, you may have already blown your New Year’s resolution (or maybe not even started it), but this is the one resolution that will increase your company’s ROI from its board. #EffectiveBoardMeetings.
I know most of us think that our board meetings are amazing, but most would also say that there is always room for improvement. Since 75% of boards that have completed our survey around the world do not conduct evaluations of their boards (click here for access to this data), it’s difficult to objectively analyze how those boards could improve. If your board is not evaluating how well its processes are working, then this blog will provide you some tips that will help you identify and #banishlowimpactboardmeetings.
While this post may seem a bit jovial, wasted time in board meetings is not funny subject, especially when a board meeting can cost as much as $100,000 (or more). I’m not just considering direct costs, like paying board members. Wasted time is also wasted money. Then add the precious opportunity cost to your company of the executive team spending time preparing and attending unproductive board meetings when they could be growing the business! Some costs are easier to calculate than others, but it is common sense that wasted board time is hugely costly to an organization.
ABA has worked with 100’s of organizations around the world to improve their board processes, eliminating costs and increasing the outcomes and ROI from their board. Here are a few of the most common types of #lowimpactboardmeetings and some simple fixes that have proven successful. Consider, or ask others involved with your board if your board meetings resemble any of the following scenarios even slightly.
“Look At Our Pretty Slides” Board Meetings
These board meetings are centered around presentations that look like they were developed by a high priced consulting firm. Lots of time is spent gathering data, analyzing data, developing and designing slides, sending the data out, and then presenting it all over again in the meeting. While the slides look pretty, they contain little strategic information to allow board members to add real value. This is usually proven by the presentations from management that need to go along with these slides. Every slide requires in depth explanation from the Executive Team (See Up to Speed Board Meetings) which takes up a lot of time and allows little time for the board members to add input. We have seen presentations with over 160 slides! Putting a bunch of data together and then sending it out, only to go through it all again is illogical and a waste of time of everyones time.
Fix – At ABA we have eliminated Powerpoint presentations completely from all ABA Client Board Meetings. Jeff Bezos has apparently caught on to our way of thinking in his meetings (click here). I wonder if Amazon follows this same idea in their board meetings? 9 years ago ABA developed our proprietary “Context Documents” which contain the Executive Team’s thoughts, questions, assumptions and obstacles to a specific strategic initiatives, but in full sentences (no bulletpoint riddled slides). Our clients eliminate 2/3rd’s of the preparation time, and increase engagement at the meeting, because much less executive presentation time is needed. Clear and concise information is provided before the meeting.
As one of our Client CEO’s recently said after his board meeting: “This board meeting yielded a huge return for the organization with only a 12 page document. I am not sure why we ever used a powerpoint deck in the past, especially one that was 78 slides long.”
“Squawk Box” or “Seagull” Board Meetings
These board meetings are notorious as the biggest waste of a company’s time and resources. We see these in all kinds of company structures, but it’s frequent in boards of Private Equity owned companies. They are typical of companies controlled by a small group of shareholders who are also in the boardroom and know more than the independent board members because they are involved with the business daily or weekly. The independent board members feel it’s their place to dictate to the company what they need to do and impart their “wisdom”, whether it is relevant to the future strategic initiatives of the company or not. Many times their “advice” is counterproductive and forces the company to consider directions that might actually be detrimental to the business.
We call these Seagull Board Meetings or Squawk Box Boards because, just like seagulls, the board members fly in for the board meeting, annoyingly squawk all day, eat all the food, crap all over the place (the distracting advice), and fly away. One CEO of a PE backed Company with a Seagull Board told me recently: “It was about as helpful, painful and costly as a root canal”.
Fix: while not easy to implement the ways to avoid this type of board meeting are very simple. First, define the objective that the Executive Team and Shareholders want from the board (and its independent members): what are one or two strategic areas where they can add the most value?. Then, focus only on those things in the agenda and board documents. Need to get “up to speed”? Do it through the documents, not in the meeting. Second, get a strong facilitator for the meeting (if the Chair is not “chairing”, get someone else) who will cut off members who go “off topic” and ensure that conversations irrelevant to the objectives are tabled for another time.
“Lets Build Rome in a Day” Board Meetings
These meetings happen when the agenda has so many big topics that it seems like the board has to solve every issue and opportunity the company has in this one meeting. It would be impossible to do a deep dive into all of the topics if we had a year of board meetings in which to accomplish this. We just went through a process helping a client who was trying to implement a board meeting like this. These are often hard to change because they are often justified by the CEO for very good reasons.
A traditional remedy is the “scheduled” board meeting process. An example of this less than effective meeting schedule would be; the October meeting is for Strategic Planning, January is for the budget, the March meeting is for marketing/branding, etc, etc. The problem is that the planned schedule may not address what is pressing and important for the organization at a given time. We see most companies working on their strategic plan all year (not once in October). And what if we have a key marketing issue after the “marketing” board meeting? Do we have to wait a year to have a deep dive board discussion?
Fix – let the most pressing and strategic issue take precedence and don’t move on to the next topic until it has been addressed. This gets board members engaged to leverage their expertise to address the issues where they will have the most relevant and immediate impact. At ABA we look at every Agenda topic in two ways: 1. Is this the most “critical” and “strategic” thing we can address? and 2. What would “solving” this issue be worth to the company (and is it higher than solving another issue)? Answering these two key questions is the basis for analyzing the ROI of the board meeting.
“Up To Speed” or “Mushroom” Board Meetings
When we’re told “we need to get our board members up to speed”, we know this board meeting is going to be as useful to the company as lighting the money it costs to have the meeting on fire. This type of meeting is usually a reporting session where the Executive Team floods the board members with information on what “has happened” (as if the numbers don’t show that already), leaving little or no time to receive information that will actually be helpful to the growth of the business.
We call these “Mushroom” board meetings because the company is treating their board members like mushrooms: we will keep them in the dark, feed them a bunch of manure and hope they grow (helpful ideas).
These meetings are typically preceded by a series of reports and presentations on what the Executive Team has done and how the business is doing. In the meeting the Executive Team explains all the information they previously sent, with little input from the board members and almost no debate on strategic initiatives. The question we ask ourselves is: “did we really need to have a meeting to accomplish this?” Or would sending out all the data have be far more cost effective accomplish the same thing?
One of our clients, Chairman of a Family Business, explained it best when he told the CEO about changing their board process: “Have you ever driven a long distance using only your rear view mirror? Do you know why? Because that is not the direction you want to go. We want to go forward fast, so let’s stop discussing “past” data in the meeting if we are not trying to go that way,”
Fix – stop “educating” the board members in your meetings. This should be done through the board documents and the follow up between board meetings. Instead, focus your meetings on the future and allow board members to “educate” the Executive Team with ideas, advice and resources that can help the company accelerate its growth. Board members will be able to do this more effectively if they have relevant and timely information from the Executive Team beforehand and eliminate backward looking “reports” from the meeting itself.
All these types of board meetings are very costly to any organization and while these situations may seem exaggerated, trust us they are not, we have seen them more than we would like to admit. While your board may not be experiencing these exact issues, even a slight resemblance with any of these situations means your company is wasting its money and the board members are not creating as much “value” as they may think.
So do your executive team, board members and shareholders a break and #banishlowimpactboardmeetings.