2010 Example Board Presentation and Discussion

I’ve updated the investor presentation deck for 2010 recently, so it makes sense to update the board of directors presentation as well.  After a successful funding, your company will start having board meetings that take a more serious tone and serve a more important purpose.

The template board presentation deck can be found and downloaded here.

My opinion is that the TYPICAL role of the Board of Directors is within an early-stage start-up is to oversee executive management, providing analysis and council for management decisions, and protecting the interests of the company and all classes of its shareholders. The earlier stage the company or the more inexperienced the management team, the more likely the board will be “hands on” with these responsibilities. The primary conduit of the board’s influence and input to the company should be through the CEO because this reinforces a healthy hierarchy: company management reports into the CEO; the CEO reports to the board.

And because the board must be able to hold the company’s executive team accountable for decisions and good/bad execution, the board should not take on operational responsibilities or make operational decisions in lieu of management…instead, the board should be close council.  Here is where the board of directors meetings and the board book itself play a critical role:  the board must have sufficient, accurate information to analyze and understand management’s proposed decisions and strategy.  The board book is the vehicle to convey this information and should therefore be carefully assembled to provide accurate, transparent and non-biased (this is the hardest part) information.

This post will cover a presentation outline and discussion for what I believe is a solid starting point for best practices in a typical, periodic board presentation by a start-up CEO.  These days, early stage companies tend to have monthly or every-other-month meetings; more mature companies rarely go longer than a single quarter without a formal board meeting.

Because the goal of a the board book and the board meeting is to clearly communicate the state of the business to board members, over the course of 2-3 hours, such that board members are equipped to perform their duties, here are a few high-level suggestions:

  • Get the executive team involved. The company is run by a team; get the team involved in both creating and presenting the material in the board meeting.  While you don’t want 10 folks in the board meeting, bringing the departmental leaders into the meeting to present their section makes a ton of sense.  It also makes sense to have the core leaders/founders in the entire meeting if they contribute broadly in the business.
  • Some board meetings are special. On occasion, you’ll have a board meeting that deals with long-term strategy-setting or operating plan approval. Such meetings deviate from normal board presentation flow outlined below.  When these unique agendas occur, my preference is to put the materials and discussion up front so you ensure you get to it.  Equally important is to ensure your board is prepared for the special agenda – this might mean getting materials to them even earlier than normal or having a prep-call before the meeting to ensure the agenda is understood.  Be sure to follow such board meetings with some communication (email, etc) that reiterates the conclusions and decisions that were made.
  • Past + Present + Future shows valuable trends. The 30-90 day time frame over which typical board meetings are concerned requires that a certain amount of past, present and future must be covered across the entire business:  how did things turn out last quarter? (the past)  what happened this quarter? (present)  what are our forecasts for next quarter? (future)
  • Metrics, metrics, metrics. If you can measure something, you can almost always manage it.  Standardizing on a set of metrics for your company that can be used to measure the health and execution of the business is a concept that is broadly applicable (critical!) to your business…but don’t miss an opportunity to align the board with the same metrics that you’re using to manage executives and run the business itself.
  • Less is usually more in board presentations. In the majority of cases, short, concise, clear information is better than tons of reports, data and analysis because too much information has the possibility of obfuscating the important, core elements of the business as it exists today.
  • Get materials in the hands of the board EARLY! In my opinion, board members should have a hard-copy of the board presentation in their hands no less than 3 days ahead of the meeting. It is DIFFICULT to create a thorough, coherent board book as it takes a significant amount of focus from the CEO and much of the senior team.  Nonetheless, it’s important if you want your board members to meaningfully engage during the meeting and between meetings.  Developing a process for creating your board book is nearly as important as the material itself; a poor process can result in late books, bad information, sloppy presentation, and make a senior team appear to be out of sync with each other. The “size and shape” of the board book should reflect the stage and complexity of the business:  early-stage companies should have a much more streamlined presentation than later-stage, larger and more complex businesses.
    • In particular, your reporting should almost universally cover a few previous periods, the current period, and as many periods into the future as you are capable to reasonably forecast.  For example, if your board meets every 30 days, you should show the past 2-3 months, the current month, and the next 2-3 months as part of reporting on metrics, finances, sales, etc.  Replace “months” with “quarters” if that reflects your business’s schedule.
    • How fast is revenue growing?  How much does it take to acquire a customer?  How much does it cost to build your product? Or host your web app?  How many lines of code? How many iterations or deployments per month?   There are many different things that might indicate a healthy business and crisp execution; they will be different for every company.

Board Presentation OutlineSlide #1: Title Board Presentation Slide

Board meetings must be managed.  The CEO must manage time, communicate data while managing the message/implications, manage coherency between departmental leaders, and manage the questions and rat-holing that can on in every board meeting.  If a board meeting is well managed, then everyone leaves feeling informed and that they are on the same page as the executive leadership of the company.  Having a good presentation creates a framework for managing a board meeting; below is one example of how you might put a board presentation together and the content that you should think about covering.

On the title page (Slide #1), be sure to include company name and date; many investors and board members will bring past board presentations to subsequent meetings to help them understand what has changed and what has remained the same…and they’re probably on numerous boards. Help them be organized and effective.

Slide #2: Agenda

This is the “call to order” slide; the agenda looks like the bulleted list. I like to put owners of the section on each agenda item and even the time that I expect to spend on that section. This gives a board meeting a structure and creates a framework to track when you’re on time versus behind schedule; it also sets everyone’s expectations about who will be in attendance throughout the meeting.Slide #2: Board Presentation Agenda

Like the investor presentation, this is a good opportunity to do an agenda check and ensure that there are no big items that your board wants to cover during this meeting.

Slide #3: CEO Overview

The CEO Update is your unique opportunity to set the tone of the meeting and set the context for the company-affecting items (good and bad) that we’re going to discuss in the board meeting. To let anyone else or other material come before your CEO update takes that control away from you.  This is a small part of successfully communicating with and managing the board of directors over time – which, in general, is perhaps one of the most important things that a CEO must become skilled at doing.

In terms of length of update, this overview should be limited to one slide because it really is only highlighting what you’ll talk about in more detail later in the meeting.  The risk of having too much detail is that the longer, deeper conversation happens here instead of later in the meeting as planned so think about this slide as providing context now in order to facilitate the discussions we’re about to have in the remainder of the meeting.Slide #3:  The CEO Overview to the board of directors

Highlights or important differences in the business since the last meeting: Here, it’s important to have a balanced take on what is good and what is not so good.  Being overly positive, overly negative or overly emotional can cause confusion on the board:  are you hiding something?  Are you overwhelmed?  What are you really trying to say?   Pragmatic, non-emotional assessment based on facts is critical and if you are giving your opinion, then clearly state that this is opinion versus fact.  This is the essence of transparency.  Be sure to talk about what is the general state of the business?  Good  Bad?  Why?  Why Not? what’s changed?  Has the strategy evolved or been validated?  How are sales coming?  Any new team members?

Key Company Goals:  Generally, start-ups will want to communicate the key success factors or goals that they have been working on since the last meeting as well as those that they are trying to achieve by the next board meeting. This is a healthy way to help the board measure the execution of the company; of course, priorities may change between board meetings but that is easily explained with the proper data.  So talk about how did the company do relative to the board-approved plan?  What are the goals for this coming quarter?  Why these the right goals?

Issues: it’s equally important to communicate the challenges in the business as well as the good news. Be sure to talk about what the company struggled with since the last board meeting?  Why?  How will you be addressing that going forward?

Create this slide last:  In terms of good process, the CEO should create the CEO Overview Slide LAST.  By creating this slide after everyone else has completed their sections and the overall board presentation is nearing completion, you can use the other board materials to inform the tone and theme of the CEO Overview.

Slide #4: Board Business

In the majority of meetings, the “business” of the board is to perform the duties associated with corporate governance. For example, approving the minutes from the prior board meeting, any proposed resolutions (such as changing the strike price of stock options), discussing and approving option grants, and other vote-oriented business is all fair game for board business.  In general, if your business is mature enough, you’ll have your corporate council at each board meeting largely acting as a secretary and available to answer any technical-legal questions.Slide #4: Board Business

The position of this slide in the deck is a change from last year; I’ve come to appreciate putting board business right after the CEO Update Slide.  It’s not uncommon for board meetings go longer than the timeframe allotted.  When this happens, it’s possible that some board members will not be able to extend their schedule and therefore miss the actual end of the meeting…so putting board business upfront where you can be sure to have the entire board present make sense.  Board Business is commonly mechanical in nature: simple votes and approvals can be handled very efficiently.

Slide #5 – 13: Departmental updates.

For each slide (especially when dealing with a variety of business metrics), try to anticipate what the questions might be.   Then, of course, have the presenter answer those proactively or eliminate them based on how you put the slide/info together.  You need to have well-reasoned logic based on as much data as possible.  Basically, when you pose a question or problem in a board meeting, you are asking the board to at least pontificate on the issue if not directly pitch in and help…if you have an opinion on that same issue, you should make that clear so the expectation is set.

In terms of ordering, most boards are interested in sales (revenue generation) first and foremost; I like taking those questions and discussion as the first order of business in the departmental updates section.  As I’ve said before, revenue solves all problems; conversely, lack of revenue is the core of all other problems.

In my experience, your company and the executive team will have a tendency to OVER communicate details in a board meeting.  What could be a 1-2 slide update can very quickly turn into a 4-5 slide deep dive that takes up a disproportionate amount of the board meeting.Slide #6: Sales update

Every section should include HIGHLIGHTS, OBJECTIVES (past, future period), and CHALLENGES.  This is the core reporting framework that every departmental head needs to start with; everything else are supporting facts and details.

Key information to cover in each section:

SalesSlide #7: Sales update2

  • Business that was closed since last board meeting
  • Your pipeline:  business that will closed during this period and beyond
  • Pipeline details: how big is your pipeline?  How do you grow it?  How do you de-risk getting those deals?
  • Revenue metrics (you see two different examples in slide #7 and slide #8); Slide #7 is more like a traditional, early-stage software company; Slide #8 fits more of a SaaS based sales / revenue model.  Both try to communicate similar information regarding trends.

Marketing

  • How are facilitating awareness and distribution as a means to accelerate SALES?
  • Successful outreach (blogs, articles, mentions, white papers, etc.)
  • Any customer feedback?Slide #8: Sales update for SaaS type business

Product / Development

  • Are releases being delivered on time?  How is quality?
  • Any new or novel developments?  Intellectual proper protection such as patents?
  • How is the team performing?  How do you measure your dev process and team?

Finance

  • How are the core business metrics: revenue, expense, and cash?
  • Any surprises on the savings or extra expense? Why?
  • When is the company’s “fume” date?  This is the date you run out of cash given the currently approved plan
  • Any operational challenges that affect the risk of the business?

Since many of the slides in this deck are repetitive, I’ll not post them all; you can download the deck (link at top) and use that as a starting template for your board meeting.

End the presentation with an open discussion and be sure to address any questions that the board may have.  If you meeting has been successful, you should have considerable notes and questions from the course of the meeting. Be sure to capture the questions and address the suggestions for the next meeting – through iteration, each board deck has the potential to be better than the last and that’s a great objective.

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6 Comments

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