Your Complete Guide to Board Meetings (Part 3): The Closed Door Session & Mistakes to Avoid

January's three part series on board meetings for tech startups

Welcome back to the third post in our series on everything you need to know about board meetings to be a POWER BROKER BABY!

As a reminder, here’s our syllabus:

Part I: Roles and Responsibilities

• CEO

• CFO

• CPO / CTO

• VCs

• Strategic Investors

• Board Observers

• Independents

• Corporate Secretaries

• Committees

Your Complete Guide to Board Meetings (Part 1): Participants, Roles, and Responsibilities

Part II: Materials and Metrics (LAST WEEK’s POST)

• Templatizing your materials

• The CEO’s Materials

• The CFO’s Materials

• Strategic Readout Materials

• Reminders, Before You Hit Send…

Your Complete Guide to Board Meetings (Part 2): Meeting Materials & Templates

Part III: Meeting Structure (THIS POST!)

• Closed Door Session

• 13 Deadly Mistakes to avoid at your next board meeting

Subscribe now, or fail your board coup like Kendall Roy

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A man who did not read Mostly metrics

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Closed Door Session (Secret time!)

• At this point the group is probably 2.5 to 3 hours in, and you’ve already covered:

  • The General Session

    • CEO Update

    • CFO Update

  • Strategic Topics

    • Topic #1 (30 min)

    • Topic #2 (30 min)

    • Topic #3 (30 min)

• And now you begin a natural transition where people get kicked out of the room, trimming the participants down as it goes

• Board + CEO + CFO

  • Typically go into the Closed Session with the CFO in the room

  • The CFO is here to cover items such as the 409a pricing, stock option approvals, and M&A offers

  • Note: If you are not on the board, you should not be in closed session

    • Board observers might stay, might get kicked out

      • The exception is the Corporate Secretary (Lawyer) who stays to take minutes

• Board + CEO + CFO

  • CFO gets kicked out

  • Now the stage is set for topics the CEO might not want to talk about with their C Suite in the room

    • CEO might talk about how the team is performing, who needs to get replaced, what’s stressing them out the most etc.

• Board + CEO + CFO

  • And then sometimes you have a session with just the Board members (excluding the CEO)

    • How did you think the meeting went?

    • How is the CEO doing?

      • Note: In a healthy, functioning company, this is pretty short, and perhaps not even needed.

      • A more detailed explanation from Jeffrey Busgang of Flybridge Capital:

When I was an entrepreneur, I was initially uncomfortable with this idea of stepping out of the room so that the board could talk about me and "my company.”

But I came to appreciate the value of the private session for both the board and the company. It's an opportunity for the board to gain alignment on the key takeaways, direction to give the management team, and also a forum to make decisions around compensation and bonuses, CEO performance feedback, financing, and generally build a functional decision-making unit. This session typically lasts for 30 minutes.

-Seeing Both Sides

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13 Deadly Mistakes to avoid at your next board meeting

Before we go, here’s a brain dump of 13 deadly mistakes you should avoid at your next board meeting: