Board meetings are great levelers. They are a reminder that no matter how big a business gets there will always be a board to answer to, to convince, to manage. And that’s not a bad thing. In fact it’s an incredibly valuable thing if approached positively and wisely. But running good board meetings is a skill that takes planning and practice. You’d be surprised how many people go into these important meetings ill prepared.
Today I serve as Company Secretary to a board of a publicly traded company in Hong Kong. But I haven’t always been involved with large organisations. I’ve also served much smaller companies, as well as charities.
I’m often asked to describe the differences between the companies I’ve been involved with. When it comes to culture, the differences are often stark. Entrepreneurs operate and think differently than the CEO of an established large corporation. The increasingly regulated environment facing larger corporations often stifles innovation and always impacts the pace at which they can operate. When it comes to board meetings and corporate governance however, the differences are less striking and in fact surprisingly similar. I argue here that there’s a reason for this. Corporate governance done well works. It works whether you’re a multi-billion dollar company or a startup. And it works in the same ways. Here are my top tips for running effective board meetings.
1. Get it in Diaries Early – Prepare an annual calendar of meetings. Get it prepared in the second half of the year for the following year. It can take longer than you think to prepare an annual meeting calendar and get signoff from all members. Particularly if you are a company listed on more than one exchange and have a controlling parent company that has its own meeting and reporting schedule. At my company we circulate the first draft of next year’s calendar in July with a view to getting it signed off at a meeting in the 3rd quarter. That doesn’t always work but getting ahead of the ball is critical when you are competing for the time of people who are already very busy.
2. Get Notices and Materials out in Advance – Send the notice and materials for the meeting out well in advance. Public companies in Hong Kong are helped and guided by the Corporate Governance Code (CG Code), which mandates when notices of meetings and materials should be sent out. A good rule of thumb is to send the notice of meeting out 2 weeks before and the materials at least a week before. At my organization this can prove challenging because there is always a last minute change or project that wants to be included. I often have to make a judgment call as to whether something is important enough to delay sending the entire pack out. It usually isn’t.
3. Prepare Good Materials – The success of a meeting depends in large part on how good the presentation materials are. There’s no excuse for including materials that are unclear or confusing and you are sabotaging your project setting yourself up for failure at the meeting itself if you attempt to do so. Don’t forget that board meetings are often the only time that members connect with an organization. A badly prepared presentation reflects badly on the work that the entire organization is doing. If the team is given enough notice, they should be preparing materials that demonstrate how impressive the company is. Other than presentations to potential customers, presentations to board members are the most important presentations that the team gives.
4. No Surprises – At my organization this is the perhaps the most important rule of all. Surprises are a bad idea generally in my view, but springing an important or controversial issue on members at a board meeting is a terrible idea. It destroys trust between management and the board and makes members wonder what else they are being kept in the dark about. Don’t be afraid of the board. In my experience they are there to offer support and guidance. They should not be treated as though they are on the opposite team. If something controversial is scheduled to be presented, call and discuss it over the phone beforehand. That’s the best way to ensure that it passes when it comes up formally.
5. Technical Rehearsals – Running a board meeting is like choreographing a production, so book the theatre and make sure the technical equipment works beforehand. We do most of our meetings in person with members overseas dialing in. I like to keep the amount of technology we use to a minimum so that there are fewer things that can go wrong and less to manage and worry about on the day.
6. Dress Rehearsals – Don’t just rehearse the technology. Rehearse the performances. They are the most important elements of the meeting. Make sure that the teams presenting aren’t doing it for the first time at the meeting. At my company we do a final rehearsal the day before the meeting and quickly run through the agenda. We also think through the issues that are likely to come up and plan for the questions. If you’ve done the preparatory work and communicated with members in advance, you know what their concerns are already so think through how they should be addressed.
7. To Script or Not to Script – I am a proponent of the well-drafted chairman’s script. It’s the best way I know for ensuring that the meeting stays on topic and is efficient. It’s also a great tool for doing the advanced planning because drafting a script requires thinking through the agenda step-by-step, down to the words that should be spoken. But whether or not to use a script will depend on the preference of the chairman. I have done it both ways in my career. A chairman who is also an executive director generally won’t require one. The criticism I hear most about scripts is that they stifle real discussion. In my experience this is not the case at all because well-drafted scripts will always build in time for discussion. In fact my experience is that a chairman’s script allows more time for genuine discussion because each agenda item is presented succinctly and clearly.
8. Take Good Minutes – This one is more complicated because in my experience the definition of good minutes depends on the culture of the organization. Some prefer minuting the resolutions and the key decisions only. Others prefer to minute in more detail, including the various discussions and questions, so that the minutes become a record of what was said and a list of action items. My preference is the former. Separate notes of the discussion can be kept for future reference but keep the formal minutes of the meeting to only what is required.
9. Listen – Encourage discussion at meetings and listen to what members have to say. Try not to get discouraged by negative opinions or if you are challenged. Not all members will agree with a given proposal all the time but that’s why boards are made up of more than one person. Your company benefits from the collective wisdom of its board members, who have been selected because of their knowledge and experience and because they care about the company’s success.
After many years of having run board meetings for some unpredictable companies and characters, I still find them challenging. Even the best run meetings can be a scary prospect with more moving parts than you know what to do with. And while no two meetings are ever the same, the list above contains some of the techniques that I have learned and used over the years to ensure that you are as well prepared as possible for success every time.
Company Secretary for an HKEx Listed Company.
September 1, 2016