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November 16, 2006

How to Keep Your Board from Meddling in Your Business

MediumNet delivered this guest blog from Larry Lazard, deceased former CEO of fictional hackoff.com.  I am not free to explain the technology involved in the transmission.

Seems like everyone is blogging about “making boards more effective” – Matt Blumberg, Fred Wilson, Brad Feld, even Tom Evslin who really should know better.  Why do you want your board snooping around your company?  You think they’re gonna add value or something?  Gimme a break! You’re the CEO; run your company and add your own value.

Look, they’re gonna meet.  Nothing you can do about that so no use whining.  The thing is to make sure they don’t get in the way of anything important.  Here’s my lessons on keeping them out of your hair.

1.        Meet by phone whenever possible.  Most of them will be doing their email or goosing their admin or something and not paying any attention at all.  They’ll just vote when you ask’em to.

2.        Never distribute anything in advance; they might read it and get themselves all confused.  Just present it all: gets you through most of the meeting.

3.        Never number the pages of what you are presenting.  Lots of time can be used constructively figuring out what page everybody is on.  If you email the material (preferably just after the start of the meeting), send lots of separate files.  Turkeys’ll never know what to look at.  Bonus suggestion: send slightly different copies of files with different pagination to everyone; it’s a lotta work but it’s worth it.

4.        Have your CFO present numbers, lots of numbers.  Make sure they get a chance to go over variances in the pencil budget.

5.        If you have to meet in person – it is gonna happen sometime – use food.  Any discussion you don’t want input on should be right after lunch.  No one’s gonna be awake then.

6.        Speaking of lunch, you can play this for lots of time.  Have your dumbest admin take orders off some huge takeout menu. Get what type of bread they want, dressing, meat, lettuce, all that. Then have a smart admin shuffle the list so NO order is right.  Wrong bread with wrong filling etc.  No veggies for vegetarians (they tend to be nitpickers anyway). Kills lots of time and helps make sure they meet on the phone next time.  BTW, they’ll pay no attention to anything between when lunch is ordered and when it comes so minimum of an hour.

7.        Do bring up board comp and director’s liability insurance.  Sure to get their attention and won’t interfere with the real business of the company.

8.        Have a nine person board with three insiders, four VCs and two people who don’t have a clue.  Just four VCs alone should guarantee gridlock.

9.        Every meeting should run way over schedule.  You control the agenda: presentations up front; substance in the third overtime period.

10.    If they’ve gotta discuss something, get’em down in the weeds.  Color of the office; words for the new ad campaign; what bank to deposit tax payments in.  That keeps everybody out of trouble.

11.    If you’re public and their questions are going where you don’t want to go, tell them you’d be glad to answer but that’ll make them insiders for the next two years.  You can also tell by who squirms who was planning to sell.

Of course I don’t endorse anything Larry says.  A good and effective board makes a good company.

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