Board of Directors Meeting – Organization, Management, Structure and Focus

Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com

As with most things in life, the effectiveness of board meetings depends on preparation, professional governance and effective execution. Leadership is critical to success – and the Chairman’s leadership style is the most important component. It is vital that meeting preparations help meet the board of directors responsibilities. Here is a checklist that might prove useful:

• Advance Notice: Board of directors meetings should be planned well in advance. Members and others attending should receive notice of each meeting sufficiently in advance to allow them to attend without having to move around preexisting commitments.
• Document Distribution: The more extensive the document which relate to a meeting, the earlier they should be provided to board members. One principal of good corporate governance is that the people who have the responsibility should be provided with the best information available in a timely fashion.
• Agenda: It is important that the agenda for the meeting be included in the advance package. Strategic issues need to be highlighted. If the board is going to discuss multiple strategies, then members need to receive adequate analysis of each option. Each strategy needs to be analyzed – its strengths, weaknesses, implications and importance should be highlighted. Every important issue to be discussed should be covered in the material provided.
• Meeting Leadership: The Chairman of the Board should run the meeting – not the CEO, unless they are the same person. Good governance requires that the discussions, decisions and actions taken in each meeting be recorded and preserved. The Chairman should appoint a secretary is to manage that process.
• Setting the Stage: The Chairman should begin the meeting with a review of the agenda then go over the documents that were provided prior to the meeting. If additional documents have become necessary, the Chairman should see to their distribution and indicate which of the agenda items they relate to. In reviewing the agenda, the Chairman should, go through the schedule and highlight each item. If an adviser or other person has been invited to attend, the Chairman should introduce them and indicate the role they have been asked to play in the meeting.
• Meeting Management: Once the preliminaries are completed, the Chairman should identify the person who is going to manage the first agenda item and turn the meeting over to them. Perhaps the audit committee or compensation committee is presenting their report. The leader of that committee should be responsible for running the presentation and discussion for that item. The Chairman should monitor the process, help keep the discussions focused and enforce the schedule.
• Moving On: Once each item has been dealt with, the Chairman should reclaim control of the meeting, summarize the results of the discussion, highlight and action steps that have been agreed on, assign responsibility for those steps and then move on to the next item.
• Keeping to the Agenda: There will be times when the meeting will stray from the formal agenda or a discussion will extend beyond the time allocated. Good governance requires that the Chairman use judgment in managing these occasions. Board governance should focus on helping the board meet its responsibilities to the shareholders. Even the best planning will not anticipate the need to stray from the formal agenda. The Chairman should make sure that these departures are productive and not merely distractions.

There are certainties in the process – here are just a few that you should watch for:

• It almost always takes more time than you anticipate – even the most mundane agenda items can prove this rule
• There are always other things that didn’t make the agenda but need to be discussed – any strategic planning process is inherently limited by the knowledge and experience of the people managing it – and, when it comes to board meetings, the possibility of unanticipated developments is very likely
• All voices need to be heard – if for no other reason, corporate ethics demand it – all members of the board share the same fiduciary obligation – each should have their say and have that say considered carefully and respectfully
• A board meeting should be a discussion not a lecture – it is important that all members see the process as one of deliberation and decision rather then receptionand blind compliance

It is important to recognize that the deliberations of the board of directors always take place under the need to assure compliance with regulation. The overriding imperative needs to be that the board engages productively on the important issues that affect the future of the company – and meets its responsibility to preserve and extend shareholder value. Planning and professional management of board meetings will greatly improve the results.

© Dr. Earl R. Smith II

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Related Articles:

• Board Succession Planning – Two Tiered Candidate Criteria

• Good Governance – Strategic Positioning for Strategic Planning

• Good Governance – Board Member Selection Criteria

• Good Governance – Keeping Ahead of Fast Company

• Governance and Risk Management Strategic Plans

• Governance – Board Culture

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