Here is some advice for CEO's from a good friend of mine, John Kernan. John has been a successful serial entrepreneur for 40 or more years. John has, over the years, run companies that have been wildly successful, as well as a couple that have failed. Over this long career, John developed a set of "rules" that help a CEO keep his (or her) board focused on helping move the Company forward.
I've worked with CEO's for more than 35 years, as a lawyer, as a VC and, nowadays, as a "Sherpa", and John is the best CEO I've ever met at "managing" his board of directors. In today's world, the term "managing", when used in connection with an information-intensive process (like CEO/Board relations), frequently takes on a negative connotation. I mean something different and positive.
What the 10 rules listed below are aimed at doing is helping the CEO use the Board of Directors in a way that best helps the Company make progress -- not by hiding information (you'll see below John's advice on dealing with bad news), but by being aware that one's board of directors, like any group of human beings, can be organized in a way that is constructive -- or not. Successful CEO's realize this and proactively try to get their boards to operate in a way that best helps the Company -- it will not come as a surprise to anyone that Boards don't necessarily self-organize into highly efficient, constructive, high-powered and helpful groups of advisers.
Here's his take on how to do this.
1. NEVER have the board meeting "at" the board meeting. ALWAYS call every director a few days before the meeting and run every important issue by them to get their input, Also update them on company performance, especially the bad news, and let them "beat you up" privately. That way, the meeting can focus in a constructive fashion on problem-solving and building the Company for the future.
2. Maximum PowerPoint show is four slides from any presenter, especially yourself. This should be the limit of director interest in detail.
3. Provide complete access for the board to everyone and everything in the Company. They will rarely use it, but it's a great comfort to them to know you are not trying to hide anything.
4. Have your key team members do almost all the presentations. It gives them exposure and allows you to make sage comments along with the rest of the board. A perfect board meeting is when 10% of the talking is done by the CEO, 60% by the team, and 30% by the directors.
5. Carefully consider every director's input and take good notes at the meeting. These people have lots of experience and many great contacts. But you make the final decisions (and if you don't, they will start to look for someone who will).
6. Give the Directors projects in their areas of expertise. It's free consulting and they usually do a good job.
7. Get in front of the board on tough decisions like top management changes, including changes to your own role. If it's going to happen, make it your idea.
8. For VC directors, try to picture how they are describing your Company to their partners, and what questions their partners are asking. Your job is to make each director a hero to their partners (or corporate boss).
9. Remember it's Company first, team second, you last. You win when everybody wins, not when just you win.
10. Make a friend of every board member. Send them interesting deal ideas you turn up, learn about their interests, make the board a "look forward to" experience for everyone.
If you work hard, always act in good faith and in the best interest of the Company -- and if you follow these 10 rules -- most VC's will still be interested in financing your next deal, even if the Company tanks.
And if the Company is a success, they will be throwing money at you!