Several things can set the tone and agenda for a private board meeting or nonprofit board, including the maturity of the organization, the economic stage of development, pressing legal or other important matters, and the impact of the economy. Templates for board meetings are helpful for forming agendas, but they should only be used as a basis for developing a customized agenda that caters to the unique needs of the organization.
The board secretary and the board chair are the key individuals with responsibility for preparing the agenda, meeting space and participants for a productive and efficient meeting. The board chair takes responsibility for facilitating the board meeting in a way that guides sound and informed decision-making.
Hallmarks of an Effective Board Meeting
The purpose of the board meeting is to get a pulse on the entity and to do a check-in on the health and profitability of the company or non-profit. The agenda forms the basis for getting valuable information, addressing important matters and making decisions. Leigh J. Abrams, chairman of the board of Drew Industries, Inc., offered up seven hallmarks of an effective meeting for board chairs to evaluate themselves as chair leaders:
- Prepares participants
- Presents a clear agenda
- Offers action items with short descriptions
- Creates a road map for decision-making
- Assigns deliverables
- Sets deadlines for response
- Disseminates key documentation and information early
The Relationship of the Executive Committee Meeting to the Board
Many private companies find that it’s efficient to have an executive committee and to use it as a steering committee for the board’s work. The executive committee vets many of the topics that don’t fall to other committees and presents detailed information about them to the full board for discussion and consideration.
Examples of such topics include:
- Long- and short-term operating strategies
- Long- and short-term goals
- Succession planning
- Acquisitions and dispositions
- Governance matters
- Use of cash and other spending issues
- Capital projects
- Risk profile
- HR and personnel matters
Taking a thorough look at these matters in the executive meetings will help streamline the agenda for the full board meeting, so board members can focus on decision-making.
Difference Between Executive Committee Meeting and Executive Session
An executive committee meeting is different than an executive session. As noted, board directors and managers attend an executive committee meeting to identify and bring the most important matters to the full board.
An executive session is a meeting in which the board directors meet without executives or other staff members present. Some companies hold a meeting of the directors and others hold a meeting with only independent directors present. There is sometimes value in getting the perspectives of board directors without the influence of management.
Some board chairpersons also like to have a one-on-one meeting with the CEO or executive director before the board meeting to gain managerial insight. It’s a prime time to check in to see how things are going and if any problems may be on the horizon.
Developing Your Board’s Agenda and Protocols
Whether you have a start-up organization or you’re ready to create a highly customized board meeting agenda, it helps to take a look at sample board meeting protocols to get some ideas for what will work best for your organization.
Use an annual board calendar to keep track of important dates like audits, the annual meeting, annual fundraisers, and reviewing governance compliance matters and insurance renewals.
Abrams offers up a sample agenda of the components of a board meeting protocol for private companies that he prefers:
- Call the meeting to order
- Make note of a quorum
- The secretary or someone else should take meeting minutes recording actions and decisions of the board
- Approve the minutes of the previous meeting
- Hear reports and updates from all committees and vote as required
- Review the financial reports since the prior meeting (the board reviews, but doesn’t approve, the financial reports unless they’ve been audited first)
- Review the status of cash and debts
- Review current or potential litigation and legal matters
- Review business matters like industry, personnel, competition, operations, etc.
- Unfinished business
- New business
Board meeting structures are not one-size-fits-all, although they often have many of the same components. This sample may be used for non-profit organizations, with a few modifications. As long as your company is abiding by and seeking to improve corporate governance practices, the format for meetings and agendas can take many forms. The important thing is that meetings, including the full board meetings, should be designed to prioritize all important matters while being as efficient as possible.
Problems That Affect Board Meeting Effectiveness and Efficiency
In addition to setting up the structure of board and committee meetings, the board chair is instrumental in ensuring that board meetings are productive.
If board meetings are continually getting off track, it may help to take a critical look at the last few board agendas to see if they include clear actionable items for discussion. It may also be that some topics are too complex and involved to resolve at a board meeting. Such topics can and should be moved to a committee to perform further work. The board chair may also decide to put time limits for discussion on certain items. Continually going over the time limit signals that the item should move to a committee.
Does your board have too many directors? Meetings that are too large limit director participation and hold the potential for unnecessary cross talk. The board chair shouldn’t dominate the meeting or allow one or two directors to continually sway the others. Meeting discussions should be balanced.
An experienced board chair knows how to redirect trivial discussions that don’t have relevance to the meeting. A seasoned board chair will also clarify issues where directors are complaining or talking rather than collaborating and working toward resolving them.
Targeted decision-making is also often a big issue at board meetings. The agenda should guide the board chair to help the board make clear-cut decisions or redirect them to committees and follow up to make sure they are brought back to the board for reconsideration.
The board secretary plays a part in preventing board meeting problems. The secretary needs to be sure that the minutes accurately reflect the board’s actions and decisions without personal or professional bias.
Board directors with chronic absenteeism or lack of participation can also be a problem. Their absence can prevent a quorum or delay a discussion. Board directors who regularly fail to show up on time and who are lax about reading pre-board meeting reports are not fulfilling their responsibilities. Board directors may need to take steps to address the non-participatory director’s appropriateness for board service or allow the director’s term to expire without re-election. Board self-evaluations may also highlight the director’s lack of commitment to board service.
Running an effective board meeting doesn’t happen in a vacuum. When each person fulfills their responsibilities and works collaboratively, board meetings can run smoothly. Remember, board meetings are a work in progress. If something isn’t working, identify the problem and keep working on it.