The ideal is alignment between what the BoD wants to see and what the management wants to report
Venture Investor, VenRock Partner, Waterfall Evangelist
Board topics cover financials, sales, new hires, challenges, future, and strategy.
Ideal early stage board meetings are primarily focused on finding product market fit.
Lesson: BoD Management with Brian Ascher
Step #6 Reporting: The ideal is alignment between what the BoD wants to see and what the management wants to report
When it comes to reporting, I think the key principle is to try and find the right balance between what the board feels they need and what management thinks is reasonable. The ideal scenario is that it's one and the same set of metrics, that there's perfect alignment around what is truly fundamental to measuring the business.
Now, that's not always possible. There's going to be some things that investors feel they need for their funds or wants to look at and some of it is just because they're certain things that are only worth looking at on the cadence of every six to eight weeks, around with cadence of board meetings but that's not what management measures day to day, week to week and that's okay, a healthy mix of the two but you really don't want to create a bunch of busy work for management.
That's terrible, it doesn't add value and so there could be push-backs from management if they feel they're being asked for too much or it's stuff that isn't really strategic. And they also have the right to expect that their board members review that material so that you don't have to spend valuable board meeting time reviewing it for them and also they don't ask dumb questions that would have been answered had they read the materials and come in prepared.
So if you can get it out, ideally, three business days ahead of time, because sometimes the folks have travel or heavy loads, sometimes, two days is defined as, I got it to you midnight the day before so you really only got it one day. A little bit of advance warning, it's not always possible, management teams are busy, but generally, if you can get organized enough to get it in advance, then, have the cram session occur a few days earlier and then you have a few days to not worry about it before the Board meeting.
I think you need a healthy mix. You need to have some good reporting, standard topics would be, financials, sales, you need to know about new hires, not in any great detail, but key hires of course and then the total. And then, you really need to know the current challenges and then, as much as possible, look towards the future, the solutions to the challenges and strategy, where we're heading over the next year to couple of years and what are the long lead time investments the company needs to make to get to the ultimate goal.
And I think that Board meetings change over time. The composition of a series A stage company Board meeting from a mid-stage to a late stage are totally different, and again, early stage Board meeting is really centered around the early stage issues of finding product market fit. So it's going to be a lot about the road map, the early beta customers, what you're hearing from those initial customers or users, maybe in the finances. It's really just going to be about expenses and how you're setting the burn rate and then key hires.
Mid-stage, you've got some product market, you're starting to develop a business model and go to market, so it's going to be a lot more about sales and pricing and partnerships. And then in the later stage, where you kind of have a bunch of those things, you can get more into a standard routine of you've got finances to report on the revenue side, as well as expense side. You definitely want to get into a cadence of a scaled-up side of selling, so how we're doing against plan, how many of the reps are making quota, how many reps are we hiring in what geographies or the business units.
And then you might get to a point where you're starting to plan out strategic as topics, either as they come up or certain topics take on an annual cadence. There's always going to be the annual financial plan typically towards the end of the year, and that needs to be front loaded by more of the strategic plan, where we're heading, maybe the product plan happens early. There's usually the bell worth session on competition. So all these things can get mapped out against the four to six Board meetings you might have in a year.
There're certain types of reports that you don't need to see every board meeting. I think a well-run company is going to do some form of customer satisfaction survey, whether it's a net promoter score or some customer survey, could be independent, could be one that you try and execute as unbiased as possible. That's something investors need to see every month or six or eight weeks, but once a year I'd say would be a minimum and if you do it more then the board will be interested in more. A report on the competition, head-to-head wins, losses, key moves they make. That's an episodic thing. You can easily consume board meetings with too much reporting and they can almost feel like a staff meeting. You don't necessarily need to hear about every single marketing campaign. You need to bubble up a level and see what channels are working, what's not, but not every single campaign. Likewise you don't necessarily need to have really, really detailed engineering reports. You need the high level. You need to know progress towards key milestones. You might need to see some quality measure. You might need to see the product road map, probably not every board meeting, but you don't need to have an hour on engineering every meeting. And you don't need to get into the technical architecture decisions every meeting. Likewise finance can sometimes go too far. A lot of finance can be done ahead of time so we don't need to be walked through cash balances and all the... you know, what we have in CDs and what we have it in the bank, that stuff is too detailed. It's not useful to go over live, if it's even useful to be in the deck ahead of time.