Your First Board Meeting
Who are board directors accountable for?
Let’s set the context. As a director, you represent shareholders, not your function or professional expertise as a CEO, CFO, CMO or strategist. You don’t represent your gender or race. Everybody on the board works together to do what is best for shareholders.
- Directors have a responsibility to understand and learn the whole business, and to have an informed opinion on the whole business.
- Boards operate more effectively if you have a sense of responsibility for the whole and an absolute belief that all board members are there to represent all shareholders, not particular sub-groups that might be a function of your background.
For example, all directors are required to sign the Form 10K. So, read thoroughly and understand it because you are legally responsible for the content; it’s not just the Audit Committee’s responsibility. Being uninformed is not a defense.
New directors, especially in the first year, have a lot of work to do in terms of getting up to speed on the business.
How do you prepare for the first board meeting?
- All directors are expected to enter the meeting well-prepared. That’s one of the reasons why you get paid.
- It’s important to understand the whole picture so you can think strategically about how to add value in the meeting by asking questions, making comments, or sharing experiences.
- Before the first meeting, review the previous couple of board meeting minutes and any supporting presentations and other documentation provided including:
Read the earnings press releases Listen to the previous earning calls Read 10-K, 10-Q, 8-K, Proxy and other documents filed with the SEC Review investor presentations
It’s good practice to request an offline session with the CFO, the General Counsel, or someone else who can help clarify any details in the documents or answer questions before the first board meeting. Other resources include the board chair or lead independent director.
Part of your responsibility is ensuring that the public filings correspond in content and in tone to what happens in the boardroom.
- Review the board book and identify anything you don’t understand such as acronyms used. It’s more effective to have an offline session (in-person or a call) to find out what the acronyms or words mean before the meeting.
- One suggestion is for a board to put together a list of acronyms and provide the list to new directors as part of the orientation process/package.
Another suggestion is to have, or ask for, a “board buddy” who is willing to guide in whispers during the meetings or talk during the breaks. This can help you get up to speed faster.