Rose Report: Issue 15

Smooth, Seamless Board Meetings

Whether a for-profit company, non-profit organization, privately owned small business, or government contractor, it’s smart to have an outside Board (of Trustees or Advisors). In addition to offering an outside perspective on business operations, boards allow organizations to draw on the expertise of specialists and stay connected with the community.

Typically an organization holds quarterly board meetings three or four weeks after each quarter ends. Smaller companies may choose to have board meetings every six months.

In the weeks leading up to a board meeting, your accounting department should send each member a board packet with detailed financial information that members can familiarize themselves with prior to the meeting—you don’t want to spend valuable time at the meeting pouring over exhaustive statistics. At the meeting, you’ll want to hand out a high-level summary outlining the company’s up-to-date financial information as well as a treasurer’s report.

When preparing these hand-outs, remember to be concise and relevant. Too much detail and your board members could get sidetracked into mundane problems; too little and they won’t get an accurate snapshot of your company’s financial health. Some of the key numbers that you’ll want to present are revenue, EBITA (earnings before interest, tax, and amortization), budget to actual, and a year-end forecast based on the current results. In addition, for-profit companies will want to present earnings per share, non-profits should present surplus or deficit changes, and government contractors should present indirect rates.

Every three to five years, a board should create a strategic plan that articulates the long-term goals and vision for the organization. As Brock Blake writes in Forbes, “This is your opportunity to look up from the day-to-day operations to study industry trends, macro conditions, customer data, competitor data, partner initiatives, and company strengths/weaknesses.”

When creating this strategic plan, it’s crucial that each goal tie back to the organization’s finances. For example, if your goal is to expand by hiring 10 new employees, you want to attach a cost to that goal: How much money will it cost to add those employees to the payroll? At quarterly board meetings, you should check in on your progress towards meeting each goal. You’ll want to talk about what happened last quarter, what your plans are for the next quarter, and discuss any shifts in the schedule. At the end of every year, the Board should update and, if necessary, tweak the long-term strategic plan with the most up-to-date information.

One common mistake made during board meetings is delving too much into tactical processes—remember to leave logistical steps to sub-committees or management. For example, the finance committee should decide how to implement the budget; the board’s role is to understand how that budget affects the organization’s strategic plan. The Board should always focus on the big picture and adopt a forward-looking perspective.