I have been a board member of many startups, and one thing I know for sure is that almost each board has a different view of its role and how to achieve it. Of course there are books and courses and blogs and all that. And everyone’s experience is different and most times not applicable to other situations… We’ve all been through at least one board member stating “when we were at IBM…”, and I am as guilty as others. Being aware of this though makes me very conscious of what I should and should not do as a board member.
First, the obvious, I do not manage the company (and yes, micro-managing is “just” another form of managing). It is tempting to be directive, and since “the CEO works for the board” try to indirectly manage him and the startup. My take is always to suggest management practices that the executive team should adopt anyway, and treat the board as a sounding board. A cliché, but it really is about coaching and less about doing. I try to provide advice, and use (sparingly I hope) the “when we were at IBM” wisdom.
One area though where board member “do” a lot is introductions, connections — usually they have a much larger and diverse network than the executive team, and I never say no. Of course it is a hit-and-miss as the level of depth of everyone’s connections vary, still worth using 110%.
The area I always insist seeing is the “board package” – may look bureaucratic in today’s age, have not seen anything better and more useful. I emphasise that format does not matter, that email/wiki/powerpoint (gasp!) are all acceptable, that what is important is the content and the mental discipline of recording and communicating status. The simplest list looks similar to this :
Show the board actual financial status and compare to present: prior-month, quarter-to-date, and year-to-date. Show profit-and-loss, balance sheet, cash flow statement, and compare to the approved budget (assuming you do have a board-approved budget, otherwise big red sign…). Need to include a rolling 12-month P&L, and an accounts receivable ageing summary.
Provide a forecast/guidance for the next month, quarter, and remainder of the year. Difficult? Means the company needs a real CFO.
Key Metrics (as applicable)
User adoption metrics, user engagement numbers, cost of customer acquisition. How is the company doing compared to expectations/plan ?
Sales and business development pipeline. Deals won, deals lost and why, where and why sales efforts are stalling, and what progress has been made on key deals.
Product roadmap high-level description needs to be reviewed at each monthly board meeting, any available new demos.
Administrative and HR updates.
Current head count by department; hiring plans for the upcoming month, quarter, and year; any issues around the team.
Once I have this (24 hours before the actual board meeting) I can provide max value to the CEO and the executive team, we can focus on constructive discussions and help the company succeed — board meeting logistics out of the way.