Luis Miranda connects dots. He started investing in India's infrastructure a long, long time ago. He started IDFC Private Equity and was earlier a part of the start-up team of HDFC Bank. Luis has invested in and has been on the boards of companies like GMR Infrastructure, L&T Infrastructure, Delhi International Airport, Gujarat Pipavav Port, Gujarat State Petronet, and Manipal Global Education. Luis today spends most of his time, together with his wife, on non-profits. He is Chairman of CORO and Centre for Civil Society and Managing Trustee for Collective Good Foundation. Other organisations include Take Charge, 17000 Ft Foundation, SNEHA, Sunbird Trust, Operation ASHA and Educate Girls. Luis graduated with an MBA from Chicago Booth and is a Chartered Accountant.
It has been board meeting season recently and I have just finished a bunch of them in the for-profit and non-profit sectors. Most of these organsiations have done a great job over the past quarter and the teams have been great.
But spending hours at these "board meetings" has been a frustrating experience most of the times – we were fed a constant diet of information-laden powerpoint slides which, at the end of the meeting, still left me unclear about the key issues that the management teams are struggling with. I wonder what the management teams are thinking after board meetings; possibly, “I spent so many hours preparing these slides, and the board had no useful inputs for me.”
It has been eight years since I was a chief executive (CEO) and presented to a board of directors. I remember that our board meetings were very useful for me since we focused on issues that mattered to us as a company, management team, and individuals.
I started writing a note to the CEOs of some of these organisations and decided, instead, to write this blog on what makes a board meeting useful for me.
Spend time thinking about the key messages you want to tell your board and the issues you want the board to help you with. This way, the CEO who is the main driver of the business, and so is supposed to know the business the best, navigates the agenda by asking the basic question, “What do I want to get out of this meeting?”
Review it with your senior management team and then discuss the agenda with the chairperson before the papers are sent to the board. There is one CEO who does this extremely well, by reviewing the business upfront at the meeting and highlighting the key areas to deliberate on.
Send the board papers a week in advance. If something is sent the previous night, most directors would not have read it. By sending the material at the last moment, the CEO is sending you the message that he or she has not planned well for the meeting. In some cases, a delay is unavoidable because of a late submission by the auditor, a recent regulatory change, and so on; but that should be the exception and not the rule.
If papers can be sent seven days in advance, one can assume that there is no need to repeat all the data and the board can immediately focus on the key issues arising out of the data.
Have a calendar for the year and be clear to block the calendars of your directors well in advance. Make sure the meeting is long enough to have a proper discussion on key matters. Often, towards the end of the meeting, we see directors leaving because they have a flight to catch. And sometimes, despite having a calendar for the year up front, directors back out of meetings at the last minute. Sometimes this is understandable, but the regular excuse that “an important meeting has come up” sends the message that this organisation’s board meeting is not important. And it leaves the management team very frustrated since they would have spent a lot of time preparing presentations. Each meeting needs a time keeper, and for board meetings, it is the chairperson. The chairperson should cut short a presentation or discussion if it is unnecessarily taking up too much time.
Avoid ‘Death by Powerpoint’
I am tired of sitting through hours of mind-numbing slides that have no message to convey at the end of the day, other than the fact that someone has spent a lot of time filling them up. And some slides have so much data in fine print that directors sitting at the back of the room can’t read anything. Guy Kawasaki had a great 10/20/30 rule – 10 slides, 20 minutes, 30 font size. Try it.
I strongly believe that if you cannot get your message out in 10 slides (with 30 font size) you do not know what your message is. The board can look at the detailed data in an annexure in the board pack.
I always used a four-part format with my board (and sometimes I used only four slides to cover them) –
(1) Highlights for the previous quarter: Start with the good and end with the bad;
(2) Snapshot of key financials;
(3) Red flags: The issues that you want board guidance on;
(4) Focus for the next quarter.
One organisation shows numbers through graphs very well. It highlights three trends –
(1) Actual vs Budget;
(2) Current quarter vs same quarter in previous year;
(3) Current quarter vs immediate previous quarter
A slide presentation is not a treasure hunt for the board. One CEO told me recently that he had talked about the main issues but that they were scattered across various slides. I told him that we had no time to waste looking through slides to find out what he was actually trying to tell us.
Be upfront and transparent. If you aren’t, then you cannot get your board to focus on the main issues and you end up wasting your time and the time of others (sometimes CEOs deliberately do this).
Also, don’t hide information from your board because the moment your board finds out, you have lost their confidence. I have seen enough CEOs getting fired soon after that. Don’t be afraid to let your board know that you slipped up on some deliverable; the board often has members who have been in similar situations as managers, and will understand your constraints.
There is one organisation where the team did not want to look inefficient with the board. So they glossed over areas where they had not done well. Here again, once the board found out, they have lost credibility and trust. Trust deficits are always difficult to rebuild.
Action taken reports
This simple part of a board agenda is often missed. By reviewing outstanding points from previous board meetings there is continuity and important matters don’t get forgotten. I have seen CEOs treat each board meeting as a discrete event, with no link to what was discussed at the previous one. This makes it difficult for board members to track what the management had committed in an earlier meeting.
Regulated organisations have a lot of statutory matters that have to be discussed at board meetings or committee meetings of the board. But they take up a lot of time, and discussions on important business-related matters get rushed through. It's important to set aside enough time for these strategic discussions. So, plan ahead and block the time of your directors in advance. Some quarterly board meeting, along with the committee meetings, may therefore need to last two days or more.
Some statutory matters need to be discussed both, at the committee meetings and at the board meetings – this is frankly a waste of time for both, the management and for many of the board members. Hence, a summary at the board meeting by the various committee chairpersons can be more useful, especially since the board members should have read the material in advance.
There is a strong argument for all directors to attend the audit committee meeting to avoid a duplicate discussion on the financials and duplicate presentations by the internal and external auditors. At one organisation, the management asked why we spend too much time discussing processes. We told them that none of us had joined the non-profit board to discuss processes; we had joined to know more about the excellent work being done by it and to help it grow. But unless we fix the processes, we could not grow. Today, after more-or-less fixing the processes, we have more engaged board discussions, because we focus on the key issues facing the organisation.
I often find myself hunting for information in multiple emails because they were sent to us at different times and sometimes the slides get updated. This is a waste of time for the directors. Today, there are platforms like Boardvantage, OneDrive, and many more that capture all board material in one place and where you can easily locate papers from earlier meetings and ensure that you are reading the latest version.
I look forward to more engaging board meetings, which the management teams also do not find to be a waste of time. But one thought that comes to my mind just as I finish writing this blog, is that it is possibly the longest one that I have written (which probably reflects my current frustration).
So, if I was to be a lot more crisp, I would just say –
(1) Carefully think about what you want to discuss;
(2) Block time properly, and
(3) Be transparent.
Board meetings need not be a regulatory time sink, but should also be a forum for CEOs and management teams to get guidance on handling business issues.