Early on in my career as a young C-level executive, I had the opportunity (actually, the dire need) to build a board of directors to help my then company, Eco-Products, navigate strategic decisions.
I had no real idea how to manage and communicate with a board, so I made it my mission to meet with and learn from some of the top CEOs in our industry and in our great home state of Colorado who were willing to talk with me.
Fast forward, now as an investor, I’ve been on the other side of the table for several years where I can reflect on how I managed a board and I can identify best practices for what makes an effective CEO-board relationship.
First, let me tell you a few reasons why it’s important to get this right as a CEO. Scratch that—why you must completely nail this aspect of your job. How you manage your board is perceived as a reflection of how you manage your team and manage your company. Do it well.
The right board members can bring tremendous value to you as a leader, through coaching and guidance, as well as to the company on strategic topics, valuable introductions, raising money and so much more. The value you can derive from a group of highly experienced and thoughtful people can be immense to your business.
Being a CEO is a lonely job. Trusted relationships with experienced board members provide an outlet to talk through topics that can sometimes be difficult for the rest of your management team to fully relate to.
The cheat sheet
Lesson No. 1: No surprises. Ever.
Never show up to board meetings with surprises of bad news. Surprises are never good—ever. If you have bad news or poor results to communicate, communicate them ahead of the meeting. It can be really effective to call board members individually prior to the board meeting to let them know what the situation is. And be prepared with what your game plan is to overcome the bad news. Don’t flop a problem on the table like a dead fish. Tell them how you’re going to work through the issue and you can always solicit their feedback on your plan of action.
Lesson No. 2: Build trust before expecting access to their Rolodex.
Don’t expect board members to willingly open up their Rolodexes at the start. Building those relationships requires patience and trust before directors are willing to put their social and reputational capital to work with beneficial introductions.
Lesson No. 3: Managing individual relationships is as (or more) important as managing interaction with the entire group.
Managing relationships with the individuals on your board is equally as important as managing the relationship with the group as a whole. Don’t just engage the group. Engage board members separately, too. That can occur through phone calls and in-person meetings to capture their undivided attention. Sometimes board members temper what they say in front of the rest of the board, so reach out to make sure you understand what they’re really thinking. One-on-one time can be invaluable to take a deeper dive into important topics and to build those relationships.
Lesson No. 4: Agree on expectations up front.
Set expectations with board members at the onset for what the time involvement will likely be. Outline how frequently you plan to have meetings, calls and other interaction. Most board members have full-time jobs, so be clear up front with how much of their time the engagement will require. And it’s always helpful to schedule a full year’s worth of board meetings and calls ahead of time so they can plan appropriately.
Lesson No. 5: View board members as an extension of your team and keep them continuously engaged.
Board members are joining your team because they want to help you. Don’t be afraid to lean on them. At the same time, be mindful of what you’re asking. Most board members don’t want to go too far into the weeds on any particular topic, but rather stay at a strategic level. If they have experience at an operational level, holding one-off deep dive meetings can be helpful, but remember that the most productive board dynamics are when the group remains at a strategic level.
Also, board members aren’t working in your business, and possibly not even your industry, every day like you, so think about how you can keep them up to speed on the company, competitive landscape, challenges and other topics with the right cadence of communication. Just once-a-quarter communication doesn’t allow for that. Brief monthly calls, or, at a minimum, monthly email updates between board meetings are essential.
In my next article, I’ll reveal tips for finding the right board members and effectively engaging them.
Luke Vernon is a managing partner of Ridgeline Ventures, and an operator-turned-investor, having led Eco-Products from under $1M in revenue to $80M before it was acquired. Luke has advised and founded several other companies, including Luke's Circle which helps emerging companies find top talent.