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L&A Original Article: Running Effective Board and Committee Meetings

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L&A attends over 100 board and committee meetings annually. Each meeting is unique; however, there is a key factor that makes a meeting and its discussions fruitful: PREPARATION. Benjamin Franklin once said “failing to prepare is preparing to fail.” L&A agrees with this adage, as an effective meeting can leave your team focused and energized. In fact, a single good or bad meeting can have a major impact on strategic initiatives, both short and long-term.


Over the past several decades, L&A has been busy in the boardroom listening, observing and teaching effective compensation and strategic governance practices. As we approach fall board and committee meeting season for 2019, L&A thought it might be useful to touch on market best practices to help prepare for and run effective meetings.

What does good meeting preparation look like? Are there any market best practices and efficiencies that will keep meetings flowing in the right direction? These are questions L&A encounters quite often and aims to tackle here.

One thing is certain about any conversation – they can become derailed very quickly and may leave those involved feeling arid and frustrated. This is especially true if there is little framework to structure a meeting. Companies that hold valuable discussions share a consistent structure that typically includes a formalized calendar, meeting agenda and materials and a lot of communication well in advance of a meeting.

Below, L&A has detailed several key factors to aid in the preparation process:

BOARD & COMMITTEE CALENDARS

For annual, quarterly or monthly meetings, board and committee calendars serve as a firm foundation for planning ahead. Scheduling dates and times for recurring meetings is imperative and it is very common for calendars to include agenda items, topics or issues for discussion.

L&A strongly encourages every board and committee it advises to create and maintain a formalized calendar.

The following details L&A’s rationale for utilizing a calendar:

  1. Defined meeting dates and times allows members time to prepare;
  2. Socializing agenda items, hot market trends or corporate objectives, key issues and questions for coverage will set the tone for the meeting ahead; and
  3. Calendars with agenda items will set expectations on the conversations to be had, keeping the group on track and the meeting pressing forward.

L&A assists public, private and non-profit companies with the review and/or development of board and committee calendars many times throughout the year.

AGENDA & FEEDBACK

Circulating a proposed agenda with other members of the board or committee two to three weeks in advance is recommended, at a minimum. If key members of management (i.e. CEO) participate in the board or committee meetings, it is good governance to solicit their feedback on the agenda as well. When all participants are informed, they themselves also have time to prepare. As a result, the level of quality discussion grows.

BUILDING OF MEETING MATERIALS

After socializing the proposed agenda, it is time to finalize the materials. This is where the majority of one’s time and energy should be focused – creating a slide deck, binder or electronic board books for distribution prior to the meeting. All meeting materials should follow a consistent structure. L&A recommends including an executive summary (a two to three-page overview of what will be covered) followed by detailed slides with topics for review and topics for approval.

SUMMARY OF PREPARATION

When time and energy are put into something, we typically expect those efforts to yield a positive result. The same can be said about preparation for a meeting. We at L&A believe meeting preparation can often times be even more important than the meeting itself.

Any director or executive who has been a part of an unproductive meeting will more than likely attribute distractions to veering off topic. Successful meetings are all about efficiency and focusing on pre-socialized subjects only. This is where the preparation process will pay dividends.

L&A has outlined meeting processes that should remain consistent in each and every formal board or committee meeting:

OUTSIDE PARTICIPANTS

L&A finds that including c-suite executives in the meeting who are spearheading any of the initiatives on the agenda can be extremely beneficial. This is an opportunity for executives to learn how the board or committee operates and a time to build relationships. A great example of this is including the top human resources executive in the compensation committee meetings, where HR updates are commonly discussed.

PRESENTATION OF MATERIALS

Throughout the meeting, participants should be engaged in conversation and prepared to stop and answer arising questions. L&A recommends designating a member to keep the meeting moving, as some questions may shift a conversation off course. Typically, this responsibility will rest with the chairperson.

EXECUTIVE SESSION

An important process in gathering feedback from the board or committee occurs during executive session. Sometimes this feedback can come in the form of an email thread; however, L&A believes it is better to hold these conversations while the topic is fresh on everyone’s mind. Executive session is where any non-independent founder or executive steps out of the room to allow for external members to review and engage in further discussion. Giving direct feedback on the spot without socializing with other members first could create tension or unintended consequences. If there is any heartburn on a related subject, it is best aired out during executive session to gauge how other members are feeling. From there, the board or committee may then decide on how best to deliver any delicate news or decisions.

CONCLUSION

Given the limited interaction of board members with management throughout the course of the year, combined with the weighting strategic matters that are reviewed and approved, management and board members should spend a sufficient amount of time preparing, socializing and creating succinct board materials. When companies have well prepared, well socialized and well run board and committee meetings, the time and energy of the participants is spent on the most important matters that will ultimately drive shareholder value.


Contact us if your company needs assistance with best practice board and committee calendars, board agendas or compensation committee material preparation, L&A will be happy to assist.