Apr 10 2007 by Jason

Board Package Series – Board Administrative Issues

In our next posting in the Board Package Series, Chris tackles what he deems (and I agree) as the least interesting board material that finds its way into the package:  Board Administrative Issues.

There’s no getting around it—there’s always going to be administrivia that a board of directors has to deal with, so your goal as CEO is to get your board through these materials as quickly as possible so you can get on to the valuable part of a board meeting (the discussion). And the way to do that is to 1) organize all of the administrative matters in one section with all of the appropriate information and 2) get that information out well in advance of your board meeting.

Examples of typical administrative matters you should include in your board package include:

– Minutes of the prior board meeting that need to be reviewed/approved by the board;

– Reports or recommendations to the board from any board committees (i.e. audit, compensation, etc.);

– Option grants requiring board approval;

– Board resolutions and other board consents such as establishing stock plans, benefits plans, etc. (and, to the extent that those resolutions or consents need explaining, provide the appropriate context);

– Reminder list of upcoming board meeting dates/times/location; and

Ed – also any other general operations, legal, real estate and other non-critical things that the board should be aware of.

There’s no greater waste of board time than having a half dozen (or more people) sitting in silence during the actual board meeting reading the prior meeting’s minutes so they can approve them. Ditto for the board having to spend time discussing what a particular board consent is for because it was included in the board package without the necessary contextual information. By religiously including this kind of stuff in your board package, you can breeze through the administrivia a whole lot faster (or at least focus on the substantive conversations, if necessary, rather than trying to get everyone up to speed on the basics).

Helpful Hints:

Detailed option grant info is important. When you include your proposed option grants, give your board enough information to understand what you’re proposing and the context. I like to see a table that shows the grantee’s name, title/position with the company, proposed option grant, existing options (if any) held by the grantee, what percent of the company (on a fully-diluted basis) the proposed grant represents, what percent of the company the grantee would hold including all prior grants, grant strike price, and vesting schedule for the proposed grant

Organize all board signature pages in one place. If you need board signatures on a bunch of stuff and will need board members to sign them remotely, organize the signature pages, along with instructions for sending them back to the company, into a single separate document. That way your board won’t have to hunt through their board packages for signature pages to sign.

Bottom line, this should be but an efficient exercise to get to the stuff that really matters.  The next posts in the series will deal with the important stuff.