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Board Meeting Etiquette Part 7 (General Etiquette)

The effectiveness of Board meetings has a significant impact on the ultimate performance of an organization. And they require a certain etiquette in order to be most effective. But how exactly should they be treated? Why should we have them? What should be discussed? Who should attend? Answering such questions can be difficult for first-time entrepreneurs who find Board meetings to be a foreign experience. Even veteran entrepreneurs should be reminded of proper Board meeting etiquette. So I’ve asked some experienced entrepreneurs and investors to offer their opinions about Board meeting etiquette in the context of small, private businesses. Their responses have been compiled into a series of seven separate blog entries.

Please share any general thoughts you have about Board meeting etiquette.

“There should be an outline and opportunity for each member to have a time to express whatever they want, but overall, it should be at the direction of the Chairman. The Chairman needs to call for a vote. The Secretary needs to be assigned to take meeting minutes or find a 3rd party meeting “stenographer” or the meeting can be recorded for future reference. The Chairman needs to call for a specific vote on matters that Board members or management bring up for a decision.” –Jaime Villagomez

“Keep it simple.” –Allan Young

“Prepare a board meeting packet and distribute to board members at least one week in advance of the meeting.  Include items that require board vote and approval so board members can consider them ahead of the meeting instead of trying to process them in the meeting.  Detail in the board packet will depend on what your board members like – some like lots of detail and some don’t.  For the meeting itself, prepare a crisp, short presentation for the company overview, but keep a lot of data and detail close at hand. Take notes.  Be formal with items requiring a vote – introduce voting items by motion, seconded by another board member and voted upon by all board members.” –Gregg Rosann

“Since the CEO tends to stuff the board with trusted allies, some boards provide only a rubber-stamp function. This is a total waste of time. A good CEO is one who encourages honest discussion and toleratesdissention on major issues. Likewise, it is not good to have cross-directorships, where the CEO serves on the board of another company whose CEO serves on his.” –Robert Rieger

“As is the case in general, Boards have experienced various levels of legal liability and cooresponding challenges. As a result it is critical that Boards’ and their members consider seriously and manage accordingly their responsibilities and follow due process and legal procedure at all times. All topics and discussions should be held in greatest confidence and recorded.” –Tricia McGarry

“There can (and should) be issues discussed regarding the (always) pending threats to the business. Disagreements better happen in a board meeting. If it is a year of “feel good” meetings then the board is dangerously blind.” –Scott Spurgiez

“The Board employs the CEO, who is responsible for maximizing shareholder wealth. It is common for the Board to also employ other chief executives.” –Jacob Webb

Previous questions:

Pt. 1: What is the purpose of a Board meeting? Why should we have them?

Pt. 2: How long should a Board meeting be?

Pt. 3: Who should do the speaking in a Board meeting and why?

Pt. 4: When is it appropriate, if ever, for someone other than a board member to attend a Board meeting?

Pt. 5: How often should a Board meeting take place?

Pt. 6: What is the most important topic a Board of Directors should address during Board meetings?

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Board Meeting Etiquette Part 6 (Agenda)

The effectiveness of Board meetings has a significant impact on the ultimate performance of an organization. And they require a certain etiquette in order to be most effective. But how exactly should they be treated? Why should we have them? What should be discussed? Who should attend? Answering such questions can be difficult for first-time entrepreneurs who find Board meetings to be a foreign experience. Even veteran entrepreneurs should be reminded of proper Board meeting etiquette. So I’ve asked some experienced entrepreneurs and investors to offer their opinions about Board meeting etiquette in the context of small, private businesses. Their responses will be compiled into a series of seven separate blog entries.

What is the most important topic a Board of Directors should address during Board meetings?

“Vision, strategy, budget, performance, capital, strategic needs and opportunities, company health and items that may compromise the goals set during the yearly planning meeting.” –Jaime Villagomez

“It depends on the state of the company.  Leadership issues are constant.” –Allan Young

“There is a fairly standard agenda for board meetings; it includes a company overview (sales/marketing, operations, financials) and various corporate governance topics, such as compensation, audit, financing and legal.” –Gregg Rosann

“The board should consider the financial position, revolver balances, ethical concerns and violations, environmental matters, bank covenant status, tax issues, audit issues, etc. Note the main point here concerns the overview of proper management controls. It does not involve whether to purchase a new copy machine for the office.” –Robert Rieger

“Economic or financial conditional factors, oversight of general management and leadership and other operational issues are those areas that a Board is most equipped and typically tasked to manage. Boards generally assume some level of liability for an organization’s management and leadership oversight, sustainability and financial health and should focus accordingly. Boards are typically the forum for managing any structural adjustments to an organization such as mergers or acquisitions or major financing events including stock structure and distributions.” –Tricia McGarry

“Varies.” –Scott Spurgiez

“Corporate strategy–financial, sales and marketing, organizational, and managerial. It should also address past performance.” –Jacob Webb

Next question:

Please share any other thoughts you have about Board meeting etiquette.

Previous questions:

Pt. 1: What is the purpose of a Board meeting? Why should we have them?

Pt. 2: How long should a Board meeting be?

Pt. 3: Who should do the speaking in a Board meeting and why?

Pt. 4: When is it appropriate, if ever, for someone other than a board member to attend a Board meeting?

Pt. 5: How often should a Board meeting take place?

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Board Meeting Etiquette Part 2 (Meeting Length)

The effectiveness of Board meetings has a significant impact on the ultimate performance of an organization. And they require a certain etiquette in order to be most effective. But how exactly should they be treated? Why should we have them? What should be discussed? Who should attend? Answering such questions can be difficult for first-time entrepreneurs who find Board meetings to be a foreign experience. Even veteran entrepreneurs should be reminded of proper Board meeting etiquette. So I’ve asked some experienced entrepreneurs and investors to offer their opinions about Board meeting etiquette in the context of small, private businesses. Their responses will be compiled into a series of seven separate blog entries.

How long should a Board meeting be?

“A standard Board meeting should take 2-3 hours to review the company’s quarterly status. A longer 4-8 hour meeting should happen at least once a year for an annual review and strategy discussion.” –JaimeVillagomez

“As short as possible without being negligent.” –Allan Young

“Board meetings should be well planned, and efficient.  Like most meetings, longer does not necessarily mean better.  I’d say no more than 3-4 hours.  Also allow for breaks.” –Gregg Rosann

“Most meetings should last no longer than 1-2 hours in length.” –Robert Rieger

“Board meetings may take an entire day or several days but typically are 2-4 hours depending on whether they are conducted quarterly or monthly (whereby the quarterly meetings generally run longer). Attendance and business issues or agendas are generally a factor involved in the time lines.  Most non-profit board meetings are held as efficiently as possible to best support the membership time demands.” –Tricia McGarry

“It varies depending upon the subjects to be covered (assuming you are not meeting with just investors).” –Scott Spurgiez

“It depends on the stage of your organization. Longer meetings are necessary during infancy, such as 2 to 3 hours. Shorter meetings are sufficient in later stages, such as 1 hour. The shorter, the better.” –Jacob Webb

Next question:

Who should do the speaking in a Board meeting and why?

Previous question:

Pt. 1: What is the purpose of a Board meeting? Why should we have them?

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Board Meeting Etiquette Part 1 (The Purpose)

Board MeetingThe effectiveness of Board meetings has a significant impact on the ultimate performance of an organization. And they require a certain etiquette in order to be most effective. But how exactly should they be treated? Why should we have them? What should be discussed? Who should attend? Answering such questions can be difficult for first-time entrepreneurs who find Board meetings to be a foreign experience. Even veteran entrepreneurs should be reminded of proper Board meeting etiquette. So I’ve asked some experienced entrepreneurs and investors to offer their opinions about Board meeting etiquette in the context of small, private businesses. Their responses will be compiled into a series of seven separate blog entries.

What is the purpose of a Board meeting? Why should we have them?

“To inform the Board members about the status of the company. To discuss strategy and budget objectives. To illicit feedback from the members. To motivate the Board to support the company initiatives both during the Board meeting and beyond. To approve measures that impact the shareholders. To review management’s performance and allow the Board to determine if management needs to be rewarded or replaced. We should have them because management needs support. A Board is intended to help create that support and be a structure not only for “approval” but to be a “sounding board”. Also management needs a focused opportunity to discuss pros and cons of the business…good things happening and challenges. A Board meeting should be healthy dialogue analyzing managements recommendations. Approval should also be sought for initiatives that effect the shareholders directly or indirectly.” –Jaime Villagomez

“The purpose is to ensure fiduciary responsibility to shareholders and to help forward strategic decisions.” — Allan Young

“A board of directors at a small company is often made up of the principal investors and the Company’s CEO. Additional people may be asked to attend board meetings, such as the CFO, COO, VP of Sales, etc. depending upon specific topics.  Board meetings are an important part of a company’s operations — they are used to keep the company’s investors informed, to solicit feedback and to provide corporate governance outside of the typical company day-to-day operations.” –Gregg Rosann

“It’s best to begin with the purpose of a board of directors. The board is a governing body of the corporation which deals with major strategic issues. Their first task is to hire a CEO and approve a senior management team. They also have fiduciary responsibility for proper capitalization of the company and in providing an adequate return and protection for the shareholders. What is important is that their role is NOT as day-to-day operational managers. Frankly, this is an area where many boards overstep their bounds. They try to second-guess the management they hired by injecting themselves in daily decision-making. It is important for the CEO to have the management authority to run the business (and provide the necessary return for the shareholders). The CEO should have the courage and personality to stand up to board members who overstep their mandate in this area.” –Robert Rieger

“Board meetings provide invaluable perspective to a private, public and non-profit entity through the expertise and may times external perspective of its membership. They allow primary shareholders, corporate officers and investors voting control and oversight of most significant business operational, sales and marketing strategies. In addition, they monitor and measure leadership and management effectiveness. They often provide a check and balance against business strategy and tactics relative to moving priorities and time lines. They may allow an organization to tap into networks and solutions available through its membership where otherwise those opportunities may be difficult or costly to source or acquire.” –Tricia McGarry

“The purpose must closely align to meet the board members needs. Early in my business I wasted a lot of time giving reports to the board members that they either didn’t understand, or didn’t care about. For example, most investors are not interested in your day-to-day woes and all of the business information. Rather, they essentially ask two questions: 1) what is my ROI (current and projected) and 2) can we close the meeting? So the purpose of Board meetings should be to address the needs of those present.” –Scott Spurgiez

“The Board is the governing body of your organization. The purpose of a Board meeting is to provide the Board with the appropriate information needed to make the most educated decisions about implementing corporate government.” –Jacob Webb

Next question (Jan 19):

How long should a Board meeting be?

Marketing with a Means-End Chain

You can use a means-end chains to develop more effective marketing messages for your product or service. A means-end chain is essentially an analytical tool that marketers use to better understand the buyer behavior of a target market. The “chain” of your product or service is divided by 1) attributes, 2) benefits and 3) values.

Smart LogoLet’s use the quirky Smart car as an example. Its small size is a physical attribute that is linked to benefits of both spacial efficiency and fuel efficiency as it handles easily in dense traffic and reduces CO2 emissions. Smart car drivers are seen as sensible and eco-friendly–psychosocial benefits of owning a Smart car. These consequences are linked to valued end states of preserving the environment and social recognition.

You may not be selling Smart cars. That’s okay because a means-end chain can be built around any product or service. However, some products don’t reach valued end states like the Smart car. Consumers probably don’t read newspapers, for example, to achieve self-actualization or to stave off world hunger. They may simply do it to for the benefit of staying informed. But that doesn’t matter; your marketing message should ideally target the highest level of abstraction towards consumers’ valued end states. In case of Smart cars, advertisements show how Smart car owners make a positive impact on their environment.

So what’s the point? As part of the development of your marketing plan you must ask, “what do my customers really value?” or “What do they really want out of life?” Whether its inner peace, social recognition, preserving the environment, self-esteem, or happiness and self-fulfillment, creating a marketing campaign that revolves around what matters most to your customers–their values–is an effective way to communicate your value proposition.

The Vertically Integrated Entrepreneur

exxon-2Vertical integration describes how involved an organization is within its supply chain. Products are sourced from suppliers at the top of a channel and distributed down through manufacturers, wholesalers, distributors, and retailers where it finally reaches the consumer. ExxonMobil is an example of a vertically integrated company that is actively involved in most areas of its supply chain from sourcing oil deposits, drilling, transporting, refining and distributing it to consumers through corporately-owned retail stations. Doing this gives Exxon more control over the operations at each point of distribution and helps to cut costs.

Being The Guy

Start-up entrepreneurs must also be vertically integrated. They must must develop the marketing strategies, compile financial reports, manage operations, receive phone calls, and develop corporate strategy. They must wear the hats of the CEO, CFO, COO, CMO, and CTO. And when entrepreneurs are not preoccupied by all of these responsibilities then they’re out trying to sell the product. If there is any time in the calendar to spare then it is probably filled pacing the hallway worrying about how you are going to make payroll.

The Blessings of Vertical Integration

Being almost everything within the context of our start-up is not done out of a need for control. It is done out of necessity due to lack of resources. If all entrepreneurs had unlimited resources then there would be no need to wear multiple hats; duties and positions could be outsourced and filled immediately upon incorporation. But there are advantages to being vertically integrated. It helps you develop empathy for future employees who will fill those positions. It gives you a well-rounded understanding of all functions of the business. And it emotionally binds you to the company.