Everything You Were Told about How to Build a Board was Wrong
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Transcript of Everything You Were Told about How to Build a Board was Wrong
BOARDS AND HOW TO MAKE THEM BETTER!!!!!!!!
©2014lescharm 1
WE NEED TO BE CLEAR Public, private, family owned, venture-backed, etc?
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In my belief, they are fundamentally different!!!!!!
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And the answers to many of the questions I would ask, would be different for each.
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ADVANTAGES
u 1.
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DISADVANTAGES
u 1.
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THINGS TO WATCH OUT FOR
u 1.
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Is the board meeting or the dinner the night before?
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Why Build a High-Impact Board?
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Sounding Board
u For you and your senior managers, helping you set your company’s top strategic goals and challenges and advise management about execution
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Forum
u For problem solving and management support
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Source
u Of critical market and operational expertise
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Resource for Identifying
u Recruiting, and onboarding top managerial talent
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Resource for Networking
u With the key people outside your company who can help your company succeed
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Bad board dynamics result
when:
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Bad…….
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u 1. The board is set up for “control” or other “non-impact” purposes.
u 2. Board members are not committed to spending the appropriate time and energy to participate and be helpful.
u 3. One or more board members monopolizes the board discussion.
u 4. Board members are not aware of or not held accountable for what’s expected of them.
BAD……Part 2
u 5.There is poor alignment between various board members around the company’s short-and long-term goals and aspirations.
u 6. The management team does not properly prepare the board to have a meaningful conversation about the company and its markets.
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Charm’s Main points
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u The more time spent on financial statements, the less the meeting accomplishes
u The more the board understands the metrics of prediction, the better the discussion .
u Running the meeting is very important
u Term Limits are critical
u The board needs to be involved in the strategy discussions way earlier than CEO’s allow or think about
u If there are outside investors, every meeting can not be a scorecard on the CEO
Directors
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AGENDA
u 1. #####
u 2. Issues that concern CEO
u 3. Issues that the board thinks are important
u 4. Senior management team rotate throughout the year
u 5. Other…….
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What one factor will most influence whether or not a board
succeeds?
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10%
17%
18%
23%
31%
creating the board at the right time
other
Having the right mix of management, independent, and investor board
members
Having effective board meetings
Having a cohesive board
Having diverse board members with the right skill sets and experience
Setting Clear Expectations,
Demanding Full Accountability
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u Four to eight hours per month for board-related activities and responsibilities
u One day per quarter for on-site board meetings
u A couple of hours per month to provide ad hoc operational or strategic advice
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Charm’s point of view
u For private and family-owned, there are no votes….
u whether formal or informal
u Major job, help the CEO with what he or she thinks is important at the moment and ( sometimes point out other issues that should be discussed)
u Running the meeting is most important along with boards expectations.
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For other boards
u VC’s don’t act like ( nor in my mind should they) like regular shareholders
u THEY DON’T REPRESENT ALL THE SHAREHOLDERS
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Public
u By The Numbers
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SOURCES: Many, many…….
u Many materials written on the subject
u Many discussions with experienced CEO’s and Directors
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