5 tips for managing your Board efficiently

The Board is the highest governing body of a company between General Assemblies. It has several important roles. This article focuses on the more practical aspects of running a board as a CEO and on business-oriented tasks for a growth company, leaving the compliance part out for now.

Written by Eivind Bergsmyr, Partner at Viking Venture

How to properly size a board?

As a founder, you can often influence the size of the Board of Directors. Our experience is that a board should ideally consist of five or six directors. A bigger board means less “air time” for each member, less opportunity to go into depth, and more people to manage. A smaller board might be less diverse and too narrow regarding knowledge and experience. Often, representative rights outside of the CEO’s control govern the size and selection of directors.

Be honest and transparent with your Board

Building a fast-growing SaaS company is a risky business. Both investors and board members understand this fact and are prepared to live with it. Making difficult decisions at a fast pace requires the best possible understanding of the situation. As CEO, you are the one closest to the situation. It is your duty to provide a transparent and honest description of the situation and the risks involved so that the Board can make the best possible decision. Leaving out some essential facts or telling the Board that the probability of getting a contract is much higher than you know is realistic blindfolds the Board and leads to wrong decisions. Many CEOs get asked to leave their position because they painted a more optimistic picture of the future than they had reason to do. As a result, it destroys the important trust between the CEO and the Board.

“Fight or flight?”

Board discussions sometimes end up in surprising directions, often fueled by the strong opinions of individual board members. These opinions might be challenging for a CEO who disagrees with the view. In such situations, it is often tempting for them to fight this view in front of the entire Board. A discussion is often necessary and important for the company and the Board. However, sometimes, considering the perspective after the board meeting is a much better solution. The latter solution provides the CEO time to reflect, pick up the phone with the actual board members a day or two later to further understand or clarify the issue and the facts, and land a better and more balanced solution. As a CEO in front of the Board, it is important to understand when and how to choose between “fight and flight”.

Preparations and clarity in board meetings

Thorough preparations are essential to a successful board meeting. This ranks all the way from what to put on the agenda via the submitted material to the proposed resolutions. The agenda is developed in collaboration with the Board Chair and must be presented to the Board in due time before the meeting. All topics should be supported by crisp and clear documentation in the right volume and level of detail. Too much documentation is equally bad as too little. Board members are usually busy people with limited time for long pre-reads. Make sure you tell the essential parts of the story and showcase the consequences and the risk as you see it. Last but not least, submit a draft of the board resolution so the Board understands what decision you want them to make. Make sure you make it easy to understand what you want to achieve on each topic on the agenda by dividing the topics into information and decision matters.

“Surprises are for birthdays, not for board meetings”!

Many CEOs have experienced that a board meeting is unsuitable for bad news! Launching bad news into a board meeting puts the board members in a difficult situation where they are expected to discuss and relate to a situation without the proper time to prepare and reflect. Our advice is simple: pick up the phone and talk to your board members in cases of bad news. Bringing up the issue upfront makes room for asking follow-up questions, gathering surplus insights, and reflecting before the question gets put on the board agenda. The tension in the boardroom reduces, and the quality of the board discussion is greatly improved. This advice also extends to the handling of complicated topics. If a problematic topic is coming up, it might be beneficial to discuss this with each board member before the board meeting to establish a common level of knowledge and start the process of maturing opinions and perspectives.

Management participation

Our experience from growth stage companies shows great value in inviting the Senior management team (SMT) to the board meeting. Their involvement ensures a complete understanding of the Board’s perspective and concerns and deep knowledge of the other functional areas of the company. To us, this is a time-efficient way to align the knowledge and perspectives of the SMT and provides great value to the Board since the company can answer most questions in the meeting. We typically plan a Board and CEO only and a Board only session at the end of every board meeting when the SMT is present. This way, there is no drama around the need for those two sessions.

Take a break!

The human brain has a limited attention span, which has unfortunately not expanded with the introduction of mobile and internet access everywhere. So, make sure to take regular breaks during a board meeting. Ten minutes per hour works well in our experience. Even if this formally is the responsibility of the Board Chair, it should be planned into the agenda’s schedule. Scheduling the agenda is a task usually executed by the CEO or the CFO.

Manage your Board efficiently

This article presents some key elements of a successful CEO/Board relationship and the foundation for conducting successful board meetings. Efficient board management involves maintaining an optimal board size. We recommend a board of five to six directors to ensure balanced discussion and expertise. Handling disagreements strategically by choosing when to debate or reflect post-meeting can lead to better decision-making. Effective preparation, including a clear agenda and concise documentation, is essential. In addition, addressing issues with board members beforehand enhances discussion quality. Engaging senior management in meetings aligns their understanding with the Board’s perspective, and scheduling regular breaks helps maintain focus and effectiveness.