Board Meetings Part 1

Depending on your company setup and the stage you are at, you may have need for board meetings some day in the future. As a business owner, your venture may scale up as time goes by to such an extent that you will need to setup a formalized structure that incorporates a board of directors, if you had not done so from company’s inception. So how do you appoint company directors? Well, for one to be a director,  either the company’s top leadership appoints them or the shareholders who, in essence, own the company elect an individual to take up the position of director. Today, we are going to look at this very important type of meeting that you as a business owner should expect to find yourself attending at some point.

What is a board meeting?

It is a formal sitting consisting of a board of directors and any invited participant.  A board meeting seeks to review company performance, attend to issues affecting the company and set the overall strategic direction for the business. Board meetings usually occur twice a year and sometimes quarterly but depending on your company’s inner workings, you can set and adjust the rate of occurrence. Keep in mind that that the intervals set should be such that you can measure the effect of changes and policies implemented in the previous sitting. It would not make sense to have board meetings conducted weekly as no significant business performance is measurable in a week.

What roles do participants take in a board meeting?

Board meetings are serious business, members of the board do not like to waste time and it is important that you as the business owner bear this in mind. In conjunction with your chief finance officer, assuming you are the chief executive officer, you may have to go through all the company documentation prior to the meeting so that you answer all questions directed to you precisely. Stammering or acting uninformed on company issues may have serious consequences like, for example, a vote of no confidence. Let us look at the typical roles and responsibilities you should expect in a board meeting:

Executive Director

This role is usually taken up by the Chief Executive Officer (CEO), also known as the Managing Director (MD) in some circles. The individual that takes up this role is usually someone the board feels has the ability and capacity to run and grow the company. It is not an easy role as one has to, at times, face and accept feedback that may be difficult to take in.

Non-Executive Director

A person in this role is one that has in-depth knowledge of business issues and industry related experience. Unlike the executive director, the non-executive director is not an employee of the company and is not involved in any way, in the day to day running of the business. This individual brings a wealth of industry knowledge allowing the board to have scope and objectivity.

Board Chair

The board chair role is responsible for good leadership and governance of the company board. Board Chairs usually collaborate with the CEO hence the need to make sure that both roles have a workable relationship. The board chair sets the tone for the meeting and  engages board members to provide insight into issues affecting the company that require  board members  expertise. For example, the board chair may engage a board member who is well versed with business law to provide insight on the legal implications of acquiring a company that has outstanding debt in the form of unpaid wages or bank loans. The focus of the board chair is always centered on what is best for the company. It is an active role that sees the custodian influencing the direction and priorities of the board as a whole.

Board Member

Individuals selected to be members of the board are usually accomplished, talented and experienced in their domains. A company invites the individuals to contribute to its success creating a synergistic drive that makes the board effective.  Note that being a board member requires time and dedication hence the attractive packages to encourage individuals to come onboard.

Corporate Secretary

The corporate secretary is mainly involved in the planning and preparation of meetings. Their role is fulfilled by making sure that the scheduling, agenda, presentation and board meeting documenting has been done.

We covered what a board meeting is and the roles that participants take. We will dive further into board meetings in part 2 of this article.