Just as fostering good relationships with employees creates a more productive work environment, managing your relationships with your Board of Directors ensures a stable and cooperative business.
A Board of Directors is an appointed group that oversees an organization and its operations. The roles of the board members, as well as how to choose members, how many members are needed and how often meetings should be held are all dictated by the company bylaws.
Oftentimes, board members are stakeholders in the corporation (usually by owning stock), and this motivates them to drive the business to success. Much of a corporation’s power lies in the board, so being able to manage your relationships with these people means you will have more control over important decisions in your corporation.
Managing Your Board
A good place to start is with a Board of Directors Agreement. This document is used to define the responsibilities and goals of board members. It also states any non-disclosure policies and information about compensation for board members.
Much of the management of the board comes down to good communication and managing expectations. Make sure all board members are informed of the company mission and ethics bylaws and the long-term and short-term goals of the company.
Follow these steps to best manage your board relationships during and between meetings:
- Selecting a consistent team with complementary personalities is vital to developing a healthy and functional Board of Directors. It’s important to find people who are knowledgeable in your field or who specialize in departments you want to work on within your company; that way, board members can provide insider advice and connections within your industry. It’s also a good idea to diversify your board and have people with different backgrounds and skills (e.g. someone with finance/investing/accounting experience and a marketing/advertising specialist). See “How to Form a Board of Directors” for more tips on building the best team.
- Have a well-designed business plan that includes the long-term and short-term goals of your organization, the methods and KPIs that you will use to measure progress and what actions you will take to get there. Communicate your plan with your board often, so it is aware of what needs to be done and is able to give suggestions or feedback.
- Since it is often difficult for people to focus on multiple tasks or issues, you may consider organizing the board into committees to maximize efficiency. This allows you to have different groups of people working on various tasks at the same time for more efficient use of the board’s time and for more productivity as a whole. Each committee can focus on one goal, product, initiative or an area that needs improvement, such as vetting a new product or improving marketing performance; this allows them to give all of their attention to one issue, which will increase productivity within each initiative.
- Build real, professional relationships with board members. You should have a relationship that makes it easy for you to bring up problems and start conversations while still remaining professional so there are no conflicts of interest. Also, encourage relationships between board members to promote an environment of cohesiveness and collaboration. You can do this by taking them out to dinner or by simply including breakfast and coffee with your meetings so that board members take some time beforehand to eat together and chat.
- Manage expectations for your company’s performance. When presenting upcoming goals at a board meeting, set goals that you know are attainable rather than lofty aspirations that are highly unlikely. If you fail to meet your goals by the next meeting, the board will be more concerned about the fact that you “failed to meet goals” than the fact that you set your goals too high. In the same token, if you set very reasonable goals, and you meet those goals, the board will be glad that you met your objectives.
- Focus on big topics instead of trivial matters than can be handled in regular staff meetings. Your board members are likely busy individuals that own their own businesses or serve on multiple committees and boards. Their time is valuable, and you want to prove to them that you respect and appreciate their time. Focus on management methods, risk management, financial and accounting decisions and other big policy decisions. Consider making a clear and comprehensive PowerPoint presentation that updates the board on the state of business, performance, revenue and projections for the future.
- Set and keep agendas. Deciding exactly what you want to address in the meeting will help you efficiently use both yours and your board members’ time. It also helps avoid off-topic conversations or dwelling on one issue for too long. Before the meeting, have your points thoroughly prepared, and be ready for the board’s questions and feedback. This will help the meeting flow more smoothly and will also earn you the respect of individuals on the board.
- Motivate board members to participate and be involved. This will help you attract high-quality board members and keep them interested in your corporation. Good motivation can come from something as simple as being part of an interesting project, judging an employee product competition or through financial incentives like company stock options.
- Evaluate the board often and ask for feedback, questions, tips and ideas. Monitor attendance and actions of board members to decide which members are the best fit for your company. This evaluation process includes recording minutes. Tracking minutes helps you monitor progress, actions taken and goals set, allowing you to update the board often on their importance and to encourage their guidance. If your company moves in a new direction, consider whether you want to bring on another member who specializes in the new field or can help get you there.
A productive Board of Directors can make a powerful impact on the progress and productivity of your corporation. Following these simple guidelines will help you build and maintain a good relationship with the members of your board.