39 – How to manage, get the most of your Board and how to be a great board member – 2 of 2

In this final episode on Boards of Directors, we will share tips for successful board meetings, how to manage them, how to be a value-add board member and insights on advisors and advisory boards. Navigation: Intro (01:34) Section 1: Tips for Successful Board meetings (02:11) Section 2: How to manage your Board (18:24) Section 3: For Board members (25:52) Section 4: Advisory Board / Advisors (33:09) Conclusion (49:19) Our co-hosts: Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder of App Annie / Data.ai, business angel, advisor to startups and VC funds, @bschmitt Nuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedro Our show:   Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news Subscribe To Our Podcast Intro (01:34)NunoWelcome to Episode 39 of Tech DECIPHERED, where we continue our discussion around how to best manage your board and get the most out of it, as well as how to be a great and hopefully non-dysfunctional board member. NunoIn this episode, we will talk about tips for successful board meetings, how to manage your board, and we'll go into details on anything from agendas to how to organize the cadence of it, KPIs, et cetera. How to think through advisory board members and advisors and how they're different from consultants and contractors, and also on how to be a fully functional board member and bring value to the company that you're a board member of.Section 1: Tips for Successful Board meetings (02:11)NunoMaybe we go to tips for successful board meetings and door calls. Maybe we go to the first one, which I know is one of your favorites. BertrandI think it's quite key to be prepared for your board meeting, and it works for both sides, the execs, the CEO, and on the other side, investors, people who receive the communication from the company. That part is quite critical. BertrandMyself, not initially, but at some point when I was running my previous business, App Annie, Data.ai now, one thing I did after ending up sending a board deck and board back instead of the usual two days before a board meeting to send it a few hours before. I was not feeling very good about how it worked out. I ended up approaching that to share stuff at least a week in advance. BertrandThat might sound crazy from a lot of perspective, but at the end of the day, it's a question of just organization. There is no reason you cannot do a week in advance. You can do two days in advance, but you would have more time. If it slips, it's no big deal. If it slips by a day. BertrandWhat it also gives you is the opportunity to potentially reach out to different board members between the moment where you send your board materials and the moment where you have your board meetings. It gives you more time to set up some calls, to answer some questions, highlight some points. BertrandIf you have time to do that between sending your board back and having a board meeting, you will have a much more streamlined board meeting itself because if the big questions have been discussed in one-to-one, if some controversies have been addressed in one-to-one, things will go a lot smoother. BertrandSurprisingly enough, some board member might prefer more challenging confrontational type of board discussion. Personally, I don't if it's not needed, but working that way gives you definitely some more efficient board meetings. NunoTo your point, manage this thoughtfully. Again, when you're sending board materials, you send it to observers as well, et cetera. If you have some lead board directors, in particular from investors, that are material to you and you know there's going to be a complex conversation at the board meeting, have that conversation even before you send those materials because you might not want to have some of this material sent out. NunoAgain, be very thoughtful how this done. I think Bertrand, you alluded to a best practice. Sadly, I have very few boards that I sit on that send their decks and their information and financials a week before. I would love to have more. I've had people sending the day of and I'm like, "I don't know what you want me to say." BertrandThat's clearly unacceptable. NunoIn that case, you need to say, "It can't happen again." In particular, if we have quarterly board meetings, which has become, again, the norm during these bullish times of the last three or four years. And if it's quarterly, honestly, a week, you should have enough time to prepare and send a week before. Worst case, you send three or four days before, but again, you should send them well in advance. NunoBe very thoughtful, again, what you put on the board materials versus what you don't put. There's elements around legality and stuff like that and materials being discoverable. There's elements around you having potentially people on the board or that you're sending the deck to that are not board members that might be board observers, or that might be privy to information or have connections to other people where the information you're sharing might be taken in the wrong way. NunoA lot of inside information cases that we've seen in large public companies have happened because of that. Either it was discussed at the board meeting or because there were materials shared that shouldn't have been shared, then further on to people that were not privy to the companies. NunoAgain, just be thoughtful on what you write in the materials, how it's written. Focus, first and foremost, the discussion on what absolutely needs board approval. Normally, stock option grants, increases in salaries, stuff like that. What should have board approval and what you should discuss, like strategic direction of the company, significant allocations of resources. NunoI always put this "cover my ass" section of risks that have emerged internally or externally. Many founders that I know like to do the tops and flops of the last quarter. Address risks pretty early on. If it's a huge risk, even before the board meeting, just put it in front of people. Don't wait for the board meeting, just put it in front of people. It's better to do that than to... If you're being sued by Google or Google has stopped you from having access to their advertising stuff... These are true stories, by the way, raise that early on rather than late. BertrandOne thing I noticed is that some CEO might be a bit too positive on everything doing great and not acknowledging enough what's potentially not working require more improvement. I think it's key to have a balanced perspective of the business because at the end of the day, you are ultimately being judged by the facts. What happened, cold hard numbers. How are you ending the year in term of sales, in terms of EBITDA, in term of cash flow? BertrandMy point is that there is only so much that everything is looking great at each presentation, but ultimately you don't make the numbers or you achieve not-so-exciting targets. I think it's quite important to show and demonstrate that you understand what's going on, you understand the positive as well as the negatives of the business. Because at the end of the day, that's the only way to propose a plan and discuss how we can do things better. NunoAlso, take credit to your point. The achievements that you've gotten to. BertrandOf course. NunoI know some founders who are like this, they only talk about the crap stuff and risks and whatever. If you're just parachuting into the board meeting, you're like, "Oh, my God." But the company is doing incredibly well. NunoAgain, also give credit for achievements. Give credit for achievements if you have a senior executive presenting to the board and that person is doing particularly well. Or even if the person is not there that you can convey to that person, the board, "I mentioned to the board your performance and they're aware of it," and all of that. NunoA couple of things on form. I don't think you should spend too much time on beautiful presentations, but really focus on content. "I have the core content there." If a board member, in particular, an investor asks you for something, make sure it's there on the next board meeting. If they ask you for North Star metrics on a certain aspect, make sure it's there in the next board meeting. If they ask you for an analysis of sales pipeline or something else, make sure it's there on the next board meeting. NunoJust pay attention to what people are telling you. These are important things because these are quarterly. If you miss two, it's like half a year. The person that is in front of you will only get the level of update they want nine months down the road and that's not cool. Again, be very thoughtful about that. BertrandYeah, and on that point, I think you can standardize board meetings presentation quite a lot. That should simplify your life. If it's always the same framework, your life would be much easier. BertrandTypically, I think you can reuse maybe 70% of your board deck quite easily and you just have some new section to talk about some stuff in product, some legal matters, some different stuff. But all the finance, sales, even quite a bit of marketing can really be quite repeatable and product metrics. BertrandYou don't need to reinvent the wheel for every board meeting. Also, it makes life of everyone easier, not just the life of the people building the decks, but also the life of board members who are reviewing these documents. If they have a different format every board meeting, that's painful. NunoThat's absolutely spot on because it makes it easier for us to also read if we're not executives. For example, I have one board where the founder CEO always does it in a memo and then has financials and minut