Navigating Your Startup Board of Directors: The Documents – Part 3 of 4

This is part 3 of a series around navigating your startup’s board of directors. It focuses on the board package, what documents and sections to include and how to organize it. If you haven’t yet done so, please read Part 1 – The Framework and Part 2 – The People.

Special shoutout to my friend Ari Newman, Managing Partner at Massive who served as an editor, contributor, and sounding board for this series.

How to put together a good board package is something I’m asked frequently, and I believe it doesn’t have to be hard if done right. If you’re thinking about your board like a reporting board, the documents will be harder and will be a significant effort and time lift for you and your executive team because you’ll be assembling them for the sheer purpose of the board meeting. But if you’re thinking about your board like a collaborative board, much of the docs can simply be an assembly of tools you’re already using across your company. 

The other nice thing about the board package is that it can be a forcing function for you, the CEO, to get crystal clear on your thinking because you’ll be forced to articulate what’s happening inside of the company, including the problems and the opportunities. Don’t think about your board deck as something you have to put together, instead embrace it as a time when you can work on the business instead of just in the business.

The 8 sections to the board package

  1. State the vision of the company. You should state this at every single board meeting. My favorite is just a single slide or page with the one-sentence vision, followed by the 3-5 company values you have. You do this with your employees, you should be doing this with your board as well. This is reusable and won’t change often, if ever.
  2. Agenda: A simple one page with the agenda plus logistics, location, and names of attendees/invitees. I’ll go more into the agenda in the next post, but the high level might look something like this:
    • Board Business: 5 min
    • Follow Up: 5 min
    • CEO Update: 10 minutes
    • The Dashboard & Functional Area Updates: 30 minutes
    • Strategic Topic #1: 40 minutes
    • Strategic Topic #2: 40 minutes
    • Executive & Closed Session: 5 minutes
  3. Board businesses: This includes items like option grants, approval of minutes, etc. Be wary of any included sensitive information and who it gets circulated to, for instance, your executive team. Sometimes you can do a link to another document that has different permissions (if going the google drive route) to keep from creating/managing multiple board packages.
  4. Follow-up: This includes any discussion items from the previous board meeting where you want to close the loop with your board. For instance, whether or not you closed that partnership, where you stand with hiring that CFO, etc. It’s likely one page, and the best time to create this document is at the conclusion of the previous board meeting, so you remember what was discussed and what you committed to. This section isn’t common, and it doesn’t have to be long, but it’s powerful, it fosters trust, and it’s phenomenal hygiene that can spread through your whole company.
  5. CEO Update.  This is the opportunity for the CEO to add a layer of narrative over what we’re about to see, any challenges the company is facing, and any opportunities that aren’t showing up in the numbers.  Most often, I see this separated out into sections like 30K View, Highlights, Lowlights/Challenges, and things we need help with.  This is the CEO’s opportunity to be transparent and authentic. The common trap here is to try to “manage” the message and pretend everything is great. No company is 100% great, there are always problems.
  6. The Dashboard & Functional Area Update: This part of the deck might encompass the most number of pages, but you won’t spend an equivalent amount of time on it in the meeting – and this is the point of circulating the deck in advance. The best way I’ve seen this information presented is via Google Sheets; they have a tab for the company overall, and then a tab for each of their functional areas. For the company overall, there’s a row for the annual goal, and supporting quarterly goals, with red, yellow, or green classifications (red = off track, needs help, yellow = off track but we have a solution, green = on track). Then there’s a row for each functional area with the same red, yellow, green classification. And then columns across the whole thing for each week, month, or quarter. I want to see this information over time, not just the current quarter. Over time is what tells the true story. In most cases the cells, while colored red, yellow, or green, also have a corresponding number that’s associated with the target for that area.  Then there’s a slide or a page that follows each dashboard with some narrative about what’s going on. The CEO uses this Google Sheet as a tool with his executive team, and simply copies and pastes (or links) it into the board deck quarterly. Then each functional area has a tab that’s set up somewhat similarly, and each executive uses it with his/her team as well. What’s interesting here is that it’s being used as a communication tool within the company to make sure everyone is on the same page about what’s going on, and then it’s simply cut/paste for the board documents. In the board package, we’ll see the high level of the company, and the high level for each functional area, with a corresponding slide/page for a narrative on what we’re seeing. While it requires effort to simplify it and get it right for everyone, once you have it set up, it becomes an operating system of sorts for your business; it is a powerful tool to make sure everyone is on the exact same page and requires close to no prep for board meetings. Spend time getting this right and my prediction is you’ll have far fewer problems and everyone will be rowing in the same direction. Your functional areas might look different, but basically, they will include:
    • Product / Engineering
    • Sales / Marketing
    • People
    • Financials – make sure you include not just actuals, but actuals to budget, and quarter by quarter for the current fiscal year, plus previous years.  The purpose of all of this information, over time, is that the movements over time are what tell the story. A single point in time (like the current quarter) doesn’t really give me any useful information.  Do this especially if the numbers are bad.  Remember your board is here to help you – this can become a strategic discussion item where your board can help you solve problems.
  7. 2-3 key strategic and discussion items: This will likely be the best and most productive part of your board meeting, and in order to get right, you’ll want to include a pre-read in your deck for what we’ll talk about. Doing a pre-read will also force you to get clear on the problem or opportunity and your thoughts about it. In the next post, I’ll go into more detail about what kinds of topics are good to cover here, but they can be any opportunity, any problem, or any deep dive you want. Remember you have a phenomenal brain trust in your board, and it’s not just limited to your board but also their network – so putting together this pre-read in the board deck will ensure people come prepared and ready to debate. The pre-read should be a written page or two outlining the problem or opportunity and what you’re hoping to get out of the discussion.
  8. Executive & Closed Session: An executive session is one where all observers and guests depart the room, leaving only the actual board directors. A closed session for a private company (different for organizations and nonprofits) is where only the non-operating board members stay in the room, which often looks like the CEO leaving the room even if he/she is on the board.  You might have content for the executive session, but take care of what you include and to whom you send it. For example, if you have an item to discuss elements of your executive team’s pay, and then email that deck to your executive team, you might create problems. Consider a separate document for any executive session content.  Since a closed session excludes you, you won’t generate any content for it. Do however, always include the executive and closed sessions in your agenda, it’s great hygiene and will reduce everyone’s stress if there’s actually something to talk about. In most cases, the board members look around the room and say “Anything to talk about? Nope, meeting adjourned.”

A Board Deck vs A Board Document

A board deck is in presentation format, such as Google Slides, Powerpoint, or Keynote. A board document is typically a PDF, Google Doc, Word, or Pages. Of course, you can do a combo if you need to. There are pros and cons to each approach: A deck is more easily digestible by your board and will force the efficiency of your words. It’s also easier to prep for the next meeting as many of your slides will get reused, just with updated numbers. Just be careful with overdesigned decks – I’ve seen a number of founders obsess over the design/look/feel of the deck. While they look pretty, and it might sound silly to say out loud, but don’t spend more time on design/layout than you do on content. Put your logo in the corner, use white background/black text, and be done with it. 

A document is a good option too, as it does allow for more narrative. This can be especially powerful in the “discussion” area of the documents, as you have the chance to give me detailed context on the conversation before we have it.  As a pre-read, it means our meetings can be much more effective and you can get more than 1 discussion topic in. Given you want the board meeting to be at least half, if not more, of discussion, this could be a good option. However I’ve seen board documents span multiple dozens of pages – and assuming you have investor board members – they’re probably on too many boards – which means they could be reading hundreds of board doc pages across all their boards. Basically, while it’s their job to read the docs in detail, it might not be practical or even possible for them to do so – and you could end up with board members skimming content rather than understanding it.  Keeping a document short, say under 20 pages, is a good idea.

I had a discussion recently with a founder who cited Jeff Bezos’ opinion on memos as the reason he was using a board document rather than a deck – and I returned that I agree with “Uncle Jeff” when you’re talking about your executive team or your employees because you are trying to storytell, to get everyone on the same page, and it’s your employees’ full-time day job to spend time thinking about and working on your company.  But in a boardroom, I don’t want a story, I want facts and a dashboard, and then I want discussion – and I DO agree that a memo is a powerful setup for the discussion section but it’s not well suited for the rest of the content.

Anyway, my point in this section is that you can use either, there is no widely accepted format, this is more art than science and is largely an element of personal preference. Do what’s best for you, get your board members’ feedback on what’s working and not working for them, figure out what’s most efficient and effective for your team to put together, and iterate on it over time.  

Shared vs Offline Board Packages:

There is a debate over which is better, an offline package that you can email around (like a PDF), or an online, collaborative version like Google Docs. The benefits of an offline doc are that your board members can read the document on the plane (which I often do), and you can combine formats into a single document, like a deck for the KPIs and dashboards, and a memo for the discussion elements. But the benefits of a collaborative online approach, like Google Preso + Google Sheets + Google Docs is that you can have your board members asking questions right in the doc, and you can answer right in the doc; ultimately resulting in part of your board meeting happens asynchronously and before the meeting, so you can spend a bulk of the in-person time on discussion. Additionally, you can control permissioning so only the right people get access to the right part of the package, meaning you’re only managing one package rather than multiple.  I tend to prefer the latter approach, I think it’s more constructive for the company and the meeting itself. However per my earlier point; do what’s best for you, get your board members’ feedback on what’s working and not working for them, figure out what’s most efficient for you and your team, and iterate on it over time. It’s largely a matter of personal preference.

Send the board package a minimum of 72 hours, if not 5 whole days, in advance

The key to a collaborative board meeting, rather than a reporting board meeting, is to set the expectation that people read the board materials in advance, you send the board package in sufficient advance of the meeting that the directors can engage with the content, you have time to reply to their probing questions, and they have time to read your replies. Sending it out 24-48 hours in advance doesn’t allow for this exchange.

Organizing packages

If you go with the collaborative approach, Google works wonders for this. Create a folder that you share with all your directors, and simply keep all board documents in it. This will allow directors to go back and reference materials, which I sometimes do. You can even get fancy and have subfolders for items like executive session content that you give limited permissions to (for instance, excluding your executive team from it). Dropbox also works well for this. But the key here is to do it.  Being organized takes a little extra effort, but it keeps everyone on the same page.

In my opinion, Google works best for board documents simply because of the power of the collaboration features. You’ll want to send your deck out 5 days in advance, create an expectation that the board directors will go through the deck in advance, and ask questions via the comment feature in advance. You can reply inline to those comments, all prior to the actual meeting. This allows all board members to see all questions and your answers (or your executive team’s answers) in advance of the meeting. The power of transparency, accountability, collaboration, and inquiry using this method are high. Plus, it gets the “bored meeting” part out of the way, so you can focus your in-person time on the interesting and meaty discussions that are nearly impossible to do asynchronously. Be wary though, do not try to have the board meeting in the comments. If it’s a longer answer, has some nuance or discussion, or isn’t ‘tactical’ in nature, save it for the meeting agenda! 

Coming Soon: The Board Meeting – how to run it

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