How to conduct a successful board meeting


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How to conduct a successful board meeting

  1. 1. TECHNOLOGY EXECUTIVES ROUNDTABLEHow to Conduct aSuccessful Board Meeting September 20, 2011 1
  2. 2. PLAN AHEAD• Set the Board and Committee Meeting schedule a year in advance on a rolling basis – and try not to change the Board dates.• Prepare an Annual Calendar of Events with Major Action Items: • Annual Budget • Strategic Planning • Executive Compensation and Option Grants • Annual Meeting – Elect Directors, Set Committees, Approve Auditors, etc. 2
  3. 3. PREPARE FOR EACH MEETING• Preparation is the key to a smooth Board meeting.• Set an agenda and assign roles.• Send the Board materials and dashboard to the Directors 3-5 business days before the meeting.• Prepare proposed resolutions in advance and distribute them to the Board before the meeting. 3
  4. 4. NO SURPRISES• Don’t surprise Directors with bad news at the Board meeting – bad news should be communicated quickly and carefully.• Socialize major issues, including financial performance, during periods between meetings.• Stay in touch with directors between meetings.• Know the answer and response before the meeting. 4
  5. 5. INVOLVE MANAGEMENT TEAM• Have presentations made by other members of the management team – engage them effectively in the Board process.• Prepare your management team for their presentations and rehearse them – every meeting is a performance review for management. 5
  6. 6. KEEP ON TIME AND ON TRACK• Start the meetings on time – even if all Board members aren’t present.• Stay with the Agenda – Avoid getting to far off the path (as much as possible).• Keep the meetings on schedule – insert time commitments on each item and try to stay as close to them as possible. 6
  7. 7. KNOW AND LISTEN TO YOUR BOARD• Review the agenda in advance with Lead Director.• Anticipate what your Board wants to cover in Meetings.• Listen and learn – accept Director feedback and apply to future meetings.• Prepare a customized dashboard of the key financial metrics relating to your company and obtain Director input and sign-off. 7
  8. 8. ACCURATE INFORMATION• Make sure all information, including in particular financial information, is 100% accurate – especially on your financial dashboard.• Mistakes result in embarrassment and loss of credibility. 8
  9. 9. KNOW YOUR STUFF• Know the Board materials inside and out.• Anticipate questions from your Board – and prepare accordingly. 9
  10. 10. MAKE SURE EVERYONE CAN HEAR• If Directors will participate by phone, make sure the equipment is adequate.• Speak loudly into the speaker phone where you have Directors participating telephonically. 10
  11. 11. CONTROL ENTREPRENEUR’S OPTIMISM• Don’t lose your entrepreneur’s optimism but keep it reasonable and under control.• Avoid 100% guarantees – sales performance, accuracy of pipeline, hiring of executives.• Use reasonable projections that have been tested.• Missing your projections and/or overstating the likelihood of success hurts credibility and, ultimately, careers. 11
  12. 12. BE MINDFUL OF SENSITIVE TOPICS• Be aware that information shared with the Board can be discovered in litigation.• Protect the attorney-client privilege by having legal counsel participate when discussing confidential legal matters• Excuse Board Observers as appropriate to protect the privilege. 12
  13. 13. USE YOUR COMMITTEES• Actively use your Committees to address: • Compensation • Accounting and audit matters • Corporate Governance, including new Directors searches• Have Committee Chairs report to full Board at each meeting. 13
  14. 14. EXECUTIVE SESSIONS• Have an executive session after each regular meeting whether or not there is a specific topic to be discussed.• Have two Executive Sessions: • One that includes the CEO (but no other management) • One that does not include the CEO or any other management members.• Elicit feedback to provide the CEO. 14
  15. 15. Presenter David M. Calhoun David M. Calhoun is a partner in the firm’s Corporate Securities, Partner Mergers and Acquisitions, and Financial Technologies practices. Morris, Manning & Martin, LLP Mr. Calhoun practices in the areas of corporate finance, securities, Phone: 404.504.7613 and mergers and acquisitions. He has significant experience in public Fax: 404.365.9532 and private securities and corporate finance, including representation of issuers, underwriters, and investors. Representative transactions include debt and equity offerings (public and private), going private transactions, venture capital financings, IPOs, secondary offerings of common and preferred securities, PIPEs (private investments in publicEducation equity), and tender offers. Mr. Calhoun has been active in mergersUniversity of Tennessee at Knoxville, B.A., and acquisitions for public and private companies, including acting as1985 counsel in transactions ranging in size from less than $100,000 to over $1 billion. Representative M&A transactions includeMercer University, J.D., cum laude, 1988 representation of both buyers and sellers in mergers, asset sales, Brainerd Currie Honor Society stock sales, international and cross-border transactions, and Phi Alpha Delta leveraged buy-outs. He has represented companies in numerous Book Editor, Mercer University Law Review industries, including technology, biotechnology, green tech, medical devices, business process outsourcing, manufacturing, real estate and financial institutions. Mr. Calhoun’s practice also includes general corporate counseling, corporate governance, audit and special committee representation, and securities law compliance matters. 15
  16. 16. Presenter John C. Yates John C. Yates is the partner-in-charge of the Technology Practice. Mr. Partner Yates is one of the pioneers of the technology law field and has been Morris, Manning & Martin, LLP practicing exclusively in this area for over 27 years. The firm’s technology practice has represented hundreds of technology companies and Phone: 404.504.5444 provided legal services in such areas as IPOs, mergers and acquisitions, Fax: 404.365.9532 patent prosecution, Internet law, biotech and medical devices, corporate finance and venture capital, international law and dispute resolution. Mr. Yates is internationally recognized in the technology law field. He hasEducation founded and been a member of the Board of Directors of leadingDuke University, B.A., magna cum laude, 1978 technology organizations for over two decades. Mr. Yates helped to found the Southeastern Medical Device Association (SEMDA) in 2004, a non-Duke University, J.D., 1981 profit trade organization that supports and promotes medical device - Angier B. Duke Memorial Scholar companies in the Southeast. He serves on the editorial board of leading technology publications, and his articles have been cited in the computer law area, including citation by the U.S. Supreme Court in Kodak vs. Image Technical Services. He is a co-author of articles published in The Law and Business of Computer Software and The Handbook of Business Management. Mr. Yates is frequently quoted in business publications, including The Wall Street Journal, The Economist, and the Atlanta Business Chronicle. Mr. Yates has also been recognized in a Harvard Business School case study (“Ockham Technologies: Living on the Razor’s Edge”) as a leading lawyer representing fast growth companies. 16
  17. 17. Discussion Topics1. What steps need to be taken to prepare for a successful Board meeting -- and when should they be undertaken?2. What financial information should be presented to the Directors in advance of the meeting? Should a financial dashboard be prepared for the Board?3. What are the most common resolutions to be considered by the Board and how should this information be provided to the Directors in advance of the meeting?4. How should good and bad news regarding the company be presented to the Board? Should it be provided beforehand by email?5. How do you maintain the confidentiality of information provided to Board members, especially if they include venture capitalists that have invested in other (competitive) companies?6. How often should the Compensation Committee and Audit Committee meet? How often should their reports be provided to the Board? 17
  18. 18. DISCUSSION TOPICS (CONTINUED)7. Does the Board need one or more outside directors who are independent of the investors? If so, how do I find these persons?8. Should the CEO also be the Chairman of the Board? Or, should someone else be the non- executive Chairman?9. If the CEO and Chairman are different persons, how often should they communicate and what should they discuss?10. How often should Board meetings be scheduled? Which ones should be in person versus telephonic?11. Whats the best agenda for a successful Board meeting? Who sets the agenda? Do all members of the management team make presentations at each meeting?12. What are the biggest problems facing the CEO and Chairman in having a successful Board meeting? 18