The Board Meeting Is Not Where Decisions Get Made — Here's How to Win It Before You Walk In

The boardroom isn't the place where major decisions are hashed out. It's a place where major decisions are officially signed off. More like a ribbon-cutting ceremony. That I learned only when preparing to present at my first-ever board meeting, in the summer of 2012. I expected a full presentation, followed by a discussion, and then a decision. And while on the face of it all went according to this plan, one important thing was off - the decision had already been agreed before the meeting. And that was my doing.

Board meetings can make or break a company. The decisions taken in the boardroom determine your strategy, your critical decisions, and how much more cash investors would be willing to put in. Sometimes, the very existence of your company might hinge on one such meeting. This was discussed at length in the wrap-up of a conversation about "down rounds" - when a company is forced to raise equity at a lower valuation than its previous round. A one tough conversation to have. How do you ensure a favourable board meeting outcome?

Back to the summer of 2012. The meeting in question was about the reshuffling of ownership of combined heat and power plants inside a corporation. You could call it a down round, since it would reduce the value of assets in some subsidiaries. Understandably, the leadership of most power plants was strongly opposed to losing control, while my task was to push through a decision to consolidate ownership in a new entity. This was a snap board meeting, called in the middle of the summer of 2012. My boss was on vacation, so I had to go in his place.

On the phone call, he gave me some advice that was crucial to our eventual success. He told me to arrange a meeting with every board member before the official meeting, go through our arguments, understand their positions, and try to reach a consensus before anyone enters the boardroom. I did exactly that, meeting with every board member, except the chairman. But that was okay, as two other board members briefed him after meeting with me. I've also met the managers of the subsidiaries and negotiated the transfer with all but one.

A week later, at the board meeting, six of the seven CHPs were transferred to a consolidated company. The one that was left out did not cause a major debate in the boardroom. The directors generally agreed that the last one should be left out, as it was serving a military research facility, while all others were strictly civilian. The meeting lasted less than an hour, with me giving a short introductory presentation, my opponents voicing their well-known objections, and the chairman formulating a decision. Everyone left the room happy, and I had just created a new company of five CHPs.

Later, in all my other board meetings, I strictly followed this framework. Never just call a board meeting, give your presentation and expect a favourable decision. That's a recipe for disaster, especially if the decision is difficult, like a down round. People usually don't take bad news well, and their first reaction is to fall back on what's familiar and protect what they have already invested. Expecting them to quickly see the situation and follow up with more money is a fantasy.

The key is to pre-orchestrate it. Hold one-on-one conversations with board members. Clearly show available options and tradeoffs. Make them see the situation from your point of view. Remember that these meetings are not so much about you and your problem, but an opportunity to understand investor motivations and capabilities at this point in time. Regardless of what you think you know about your investor, their current situation might be very different, and their decision might unpleasantly surprise you. When you fully understand each director's current position, you may hash out a decision right there and gain the support of all of your board members, or at least a majority.

Now, you might think, "I know my investors well, and anyway, I don't have the time to meet all of them one-on-one!" True, any founder knows that their time is the most scarce resource that they have. What is also true is that as a founder, and especially as a leader of a scale-up, you have to spend your time on things that matter most to your company. Board meetings are rarely called to rubber-stamp some large purchase or your management's remuneration. These are often make-or-break decisions. Failing them could mean you lose your company. Rank your priorities.

There is a way, though, to free up some time for a founder while still meeting and prepping all the board members. If you have a trusted advisor, or a deputy (usually a director for strategy or finance) who knows your business very well, who is known and trusted by your board, and whose negotiation skills are battle-tested, you can rely on him or her to do the one-on-one meetings with board members. For many years, I fulfilled this role for my boss, and later, when I became a CEO, I had my finance director take it on.

The one-on-one meetings are a concrete example of what people really mean when they talk about "building trust" and "communication skills". Having a non-formal communication, where people can openly ask questions and not publicly and legally commit to a decision immediately, helps a lot. Having someone who has done this many times over is even better.

Today, as an independent scale-up advisor, I help scale-ups establish trust and clear communications with their boards. I fill this advisor position and help to pre-orchestrate your board meetings so that they become places where decisions are made, rather than postponed. If you are in the middle of preparing for your next board meeting and feel you could use a little help, a call would be a great place to start.