Do you engage your board effectively?

I spend a lot of time working with founders on interactions with their Boards. There are two main challenges:

1. What information should I present to reflect the commercial status of the business?

2. How do I stop them making my life hard?

Both of these issues come from the CEO/Board not having consensus on what the business is optimising for in the next 12-18 months and an agreed plan and metrics for tracking against that mission. (Which should not be “grow at x %”. That's a lag metric. You need leading indicators showing that you are on target.)

My first question above is in some ways straightforward: the information you should present the Board is the information which allows you to track against the mission. You will always struggle if you measure the business based on one set of metrics – something you work on with your management team – and have a separate view that you present to the Board.

On the second point, it always depends on why the Board is making life hard. Sometimes it’s because you are not being open with information, or you are consistently mis-forecasting. In which case, they are not only entitled but obligated to push you. But there are two other significant concerns to beware of.

* The first is misaligned incentives. When investors join a Board, you are typically well aligned. But over time, your goals may change. For example, VCs want you to grow very fast, but maybe a modest growth path at some point makes more sense? You must recognise the mismatch and openly address it with your Board members.

* The second possibility is that you don’t manage your Board. Great founders lead the Board, even if they’re not the Chair. They provide substantive information, focussing on the key topics. They have the 1-1 conversations with Board members. They clarify what the strategic options are and work with the Board to pick the right one. Founders who struggle tend not to manage the board. They are buffeted by the different personalities at different meetings. There often providing last-minute shocks to the Board. They will get pulled from pillar to post without clarity.

Remember: the key is to have alignment on the mission and metrics.