Board meetings provide opportunities for alignment, review, forecasting, and decision-making in company strategy.
Evolution of board meetings to more real-time, iterative, and informal discussions allows for practical decision-making and ongoing support.
Value creation in board meetings comes from aligning goals, engaging in strategy discussions, and leveraging collective wisdom.
Investors' support during company pivots and executive turnover is invaluable in providing guidance and stability.
Deep dives
Value of Board Work
Board work involves both the government aspect and the advising aspect. The government aspect includes tasks like setting the plan for the year, approving financial and organizational plans, and making shareholder approvals. The advising aspect involves providing input on company strategy, operations, recruiting, and future financing. Board meetings are an opportunity to align everyone, review business performance, forecast future goals, and make decisions. The increased real-time and iterative nature of board work allows for more touchpoints, rapid decision-making, and tapping into the collective wisdom of board members.
Evolution of Board Meetings
Board meetings have evolved from being formal and occurring six to eight times a year to being more iterative and fluid. There is now a shift towards more real-time and informal discussions happening outside of formal board meetings, through various communication channels. While some companies still have formal board meetings, others opt for shorter meetings or more frequent catch-up calls. This evolution allows for more reactive and practical discussions, tap into the collective wisdom of investors, and provide ongoing support.
Strategy Setting and Execution
Board meetings play a crucial role in setting and executing company strategy. They involve reviewing business performance, discussing forward-looking forecasts and goals, and aligning everyone on the plan. Strategy discussions focus on execution, innovation, hiring, building management teams, and growing the customer base. A board member's fresh perspective and ability to offer valuable insights contribute to strategic decision-making.
Value Creation and Potential Detraction
Value creation in board meetings comes from aligning goals, engaging in strategy discussions, and leveraging collective wisdom. Potential detraction may arise from ineffective portfolio services or misaligned incentives. However, the industry has moved towards outcomes that generate value and away from detractive practices, making valued detraction less common. Overall, board meetings provide an opportunity for guidance, insights, decision-making, and collective problem-solving.
Importance of thoughtful engagement in board meetings
In board meetings, it is crucial for board members to stay quiet, be thoughtful, and carefully consider their contributions. By keeping a filter on their thoughts and asking themselves if their input will be valuable in that moment, they can determine if it is best to ask their questions or share their ideas during the meeting or later via other channels. Writing down thoughts and following up after the meeting can also help refine ideas and maintain a reference for future discussions. This promotes efficient and effective communication in the boardroom.
The value of investor support and mentorship during pivots
When a company undergoes a pivot or faces significant challenges, the presence of a supportive investor can be invaluable. By fostering strong relationships with founders and management teams, investors can provide guidance, stability, and a fresh perspective. This support can empower teams to navigate difficult decisions with clarity and creativity. Additionally, investors who have experienced successful pivots in the past can offer insights and mentorship, helping founders identify opportunities and overcome obstacles.
Navigating co-founder and executive turnover
Co-founder and executive turnover can be complex and emotionally challenging for companies. Investors can play a crucial role in helping navigate these situations by providing an objective perspective and being a steady influence. By offering guidance on potential role changes or facilitating honest conversations about the team dynamic, investors can assist in finding a path forward that aligns with the company's goals and values. In some cases, supporting a difficult decision such as founder departure or a necessary executive change can be necessary for the long-term success of the company.
We continue our VC Fundamentals series with Company Building — everything that happens after you write the check. We catalog the different categories, strategies and tactics for VCs to "add value" to their portfolio companies, from direct involvement to portfolio services to simply doing nothing (often better than many alternatives!). For both of us, this is the best and most fun part of being an investor, and we hope that shines through in this episode. Here's to building great companies!
