Leadership

The New Rules of Board Meetings

Today's mounting volatility is forcing boards to make key changes in their approach to meetings: "Less formal, more updates."

Three Do's and Don'ts for Effective Board Meetings

There’s an axiom that consultants who work with CEOs will often share with them: The more time a leader spends managing the board, the less time they’ll have to manage the company.

But in times of uncertainty and volatility, stakeholders and investors may expect more frequent meetings so that the board can hash out responses to inflationary pressures, geopolitical instability, and dwindling growth opportunities. Meeting formally only four times a year can’t possibly do, right?

As it turns out, four meetings might be enough. But frequent updates matter.

Several studies, some from as far back as the 1990s, show a relationship between the number of meetings and shareholder returns. The gist: Fewer meetings can correlate with stronger market valuations. But a forthcoming Korn Ferry survey of CEOs and board directors finds that 43% of respondents receive regular briefings on geopolitical risks once quarterly, 30% receive them once monthly, and only 6% receive them once weekly—even in times like these. “I don’t think the fact that you get together eight times a year versus four times a year makes a material difference,” says Dennis Carey, vice chairman at Korn Ferry. “Fewer formal meetings and more frequent updates are much more effective.”

Here are few modern do’s and don’ts our experts suggest:

Do: Embrace the Email Update

When situations are fast-moving—a supply-chain issue that may affect earnings forecasts or a war that may shut down production facilities—taking 10 minutes to email an update can be critical for directors. A quick phone call between the CEO and the board chair can save a huge amount of time, because the chair can then pass along an update to the board, says Jane Edison Stevenson, Korn Ferry global vice chair and global leader of the firm’s Board and CEO Succession practice. “Meetings may feel like a waste of time given the lack of predictability around things,” she notes.

Don’t: Focus on Operational Details

There are plenty of directors who can tell you about how a debate about office renovations once took up a quarter of the board meeting day, or how vendor contract discussions pushed back a more important agenda item. Too often, board meetings focus on operational reviews or updates instead of drilling down on strategic planning. When you’ve flown in half a dozen people and required them to set aside several days for discussions, it’s best to use that time wisely, experts say. No wonder 20% of the survey’s respondents said they review succession plans only once a year.

Do: Minimize Formal Board Meetings

Anyone who’s ever tried to recruit board directors knows there’s usually no shortage of willing participants—until you tell them about the time factor. Even if a company meets formally only four times a year, travel and preparation typically double (or more) the number of days required. “Boards can gobble up time quite easily,” says Scott Atkinson, senior client partner in Korn Ferry's Global CEO and Board and Financial Officers practices.

Don’t: Overload Directors with Pre-reading

They won’t read it if it’s too much, which means that much of the meeting time will be wasted on addressing questions that were answered in the pre-reading. A sweet spot for prep materials, experts say, is around five pages. These materials should highlight, in concise language, important items for decision-making and discussion. Appendices will allow members to do a deep dive into a topic, should they want to. Finally: Deliver the materials at least a week in advance, if possible, so board members can fit the reading into their schedules.

Do: Focus In-person Board Meetings on What’s Keeping the CEO Up at Night

The best boards skip agenda formalities that aren’t relevant to the current moment and focus instead on what’s keeping CEOs up at night. Leaders can also use board meeting time to ask directors if they’ve missed an issue that should be on their radar. “The board’s job is not to get under the hood of the car,” Carey says. “It’s to ask the most probing questions about what’s going on.”

Don’t: Be Afraid to Experiment

At a time when the word “unprecedented” is being thrown around on a regular basis, it’s unrealistic to expect every board meeting to run smoothly. That’s why it’s important for boards and the C-suite to be adaptable—to try out new agendas, discussion methods, and more in order to find a groove that works for everyone. And if doing this seems like a frivolous exercise, think of it this way: It might just become your company’s competitive advantage.