Your complete guide to board rooms
A guest post by CJ Gustafson of Mostly metrics
👋 Hi, it’s Kyle Poyar and welcome to Growth Unhinged, my weekly newsletter exploring the hidden playbooks behind the fastest-growing startups.
I hate to break it to you, but we’re quickly approaching 2025 board meeting season. No other meeting provokes as much fear, anxiety and angst — among both founders and leaders. For help I turned to my friend CJ Gustafson, CFO and writer of the 🔥 Mostly metrics newsletter. It’s one of the few newsletters I consistently read, but don’t tell CJ I said that. This is a piece you’ll want to bookmark for later.
When Kyle asked me to a do a post on board rooms I laughed, because I spent the last two years of my life trying to navigate fastballs that came directly from his crew. That’s right — Kyle’s firm was an investor in my company during my first CFO gig.
Tim: If you are reading, I’m still mad about Q2 of 2023 when you asked if we were “burning through our market”. Also, the Eagles suck.
I wish I could go back in time and give this guide to CJ and say,
“Hey, here’s what each person is trying to accomplish.”
But seriously - much of my career has been dedicated to the preparation and execution of board meetings — whether I was the actual person doing the presenting, or the “guy behind the guy” running the deck.
This guide is for both of those people. Don’t leave home without it, and remove all sharp objects from the room before reading.
Today we’ll cover three major areas:
Participants, Roles and Responsibilities
Structuring the Meeting
The Art and Science of the Pre Read
And if you’re interested in some spicy templates to actually build your board materials, you can get them here.
Participants, Roles and Responsibilities
CEO
Chairman
The CEO is typically the President and Chairman of the Board
Chairman is also a common role for a former CEO who’s transitioned out of the day to day of the biz - like Brian Halligan of HubSpot or Jeff Bezos of Amazon.
The (current) CEO facilitates the discussion
You can get templates of the CEO’s materials here
Splash Slide of Top Metrics
What’s Working / What’s Not Working
P&L and Cash Burn
So is the board the CEO’s boss?
No, they are no one’s boss
They do oversee the CEO, but they are not a boss in the conventional sense of the word
This is a more intuitive concept for founders than non-founders
The people who have trouble with this concept are those who climb the corporate ladder and become a CEO, i.e. “professional CEOs”
If you’re one of those lucky souls who made it to the “boss” level of the career video game, as a default you’ll want to treat the board as a boss, since you’ve been used to having a boss for [20] years
The board does, however, hire and fire the CEO on behalf of shareholders, when appropriate
They also determine the CEO’s compensation package
CFO
The CFO is responsible for updating the board on the company’s financial performance
They are also responsible for leading the Audit Committee, and sometimes the M&A Committee
They will generally facilitate (with the help of the CEO) discussions around:
Acquisitions
Letters of intent (LOIs)
409a valuations
Stock option grants
So does the CFO work for the board?
No, the CFO works for the CEO. Full stop.
The CFO has a fiduciary responsibility to the shareholders, and many of those shares do sit in the hands of the board
But a CFO does not report to the board; he / she consults and updates the board
The CFO is probably the second closest to the board, other than the CEO; but they are not the CFO’s boss, even if they recruited the CFO
Don’t get it twisted
CPO / CTO
The CPO / CTO is responsible for updating the board on the company’s technology roadmap
They are also responsible for leading discussions around adjacent market opportunities
Why? Acquisitions rarely work out if the technical side of the house isn’t motivated to make it work, and truly sees the tech opportunity
Otherwise it’s a bunch of corp dev junkies chasing cars like a wild dog in the street - they wouldn’t know what to do with it if they caught one
It’s important to note that:
This role in the board room may be filled by the CEO if they are a technical founder
If the CTO / CPO is not a founder, they don’t usually attend every board meeting, and are brought in for quarterly updates on roadmap or strategic discussions around M&A and partnership opportunities
Investors
Investors
Represent the preferred shareholders
Preferred shareholders have certain rights
Liquidation preferences: they get paid first if the company is sold for less than the latest valuation
Voting power on key issues
Deal blockers on M&A (sometimes)
These shares come at a premium to common shares, because of those special rights
Each preferred round (e.g., Series A, Series B, Series C…) usually comes with adding at least one new board member
Sometimes VCs will also negotiate for an Observer Seat (more on that below)
It’s important to note that a VC is definitionally conflicted
They have a fiduciary responsibility to all shareholders, but notionally represent their class
They go against the first when they wipe out common upon liquidation scenarios
Strategic Investors
Companies / Corporations on the cap table
This is usually a company from your ecosystem who’s partnership accelerates your product roadmap, your sales (as a big customer), or both
It may also represent a corporate conglomerate who wants to keep an eye on you in the hopes of buying the whole thing if you hit certain milestones
They typically don’t have the hardcore financial return profile of investors
While they don’t want to lose money, they are more interested in the synergies your company has with theirs, rather than simply the financial outcome
They have the ability to do A (us) + B (you) + C (synergies) = D (a shit ton of money) that VCs can’t tap into unless they orchestrate a roll up themselves
Board Observers
“Victorian Children”
In the words of Dave Kellogg, “Board observers are like Victorian children: they should be seen and not heard”
Observer seats are hotly negotiated, which is somewhat of a moot power move, since they don’t really get a voice
So what’s the point?
Most observers are up-and-coming members of the VC’s investment team; observer seats can serve as training wheels before prime time
They can also be helpful from the VCs perspective if the board member is on a ton of boards and needs some air cover
It’s also common for VCs to offer up their board observers to the company’s CFO, FP&A team, or Corp dev team as an extra set of hands on special projects (e.g., M&A targets, churn, new product launches)
It’s so nice when you get a former McKinsey lackey doing TAM work for you!
The Independent
Represent the Common shares
Independents hold common shares, just like employees
They are there to protect the interests of the Common shareholder if the Preferred shares try to make a move that’s in conflict to their interests
For example, there could be an acquisition scenario where preferred shares have a liquidation preference which wipe out common
It’s therefore the implied role of the Independent board member to vote on behalf of “the little guy”
The Coach and the Mentor
The more conventional view is they are a current or former operator, and can serve as a mentor / coach to the CEO
It’s lonely at the top — the independent can be a great sounding board when the CEO doesn’t want to look weak / overwhelmed / unsure in front of their institutional investors
Most independent board members are very successful founders or execs in their own right
As such, they typically have done pretty well financially
Therefore, they shouldn’t have the majority of their wealth tied up in your company - that would skew their view
Finding the right Independents
Investors can help find your independent, but the Independent shouldn’t “work” for the VCs
Sequoia will give you one hell of an independent director
But they should also be free thinking enough to voice their own opinions
Corporate Secretary
Lawyer stuff and scribe shit
This is usually your Chief Legal Officer, or if you don’t have one, your corporate counsel, like Cooley or Goodwin
The idea is that they are cheaper in the long term when they generally know what’s going on at the company
And most of the time, they don’t charge for this time commitment
They also take kickass notes so you don’t have to type up all your shit in a MSFT Word doc after
Committees
Nom / Gov Committee
Identify and nominate new board members
Evaluate the skills, experience, and diversity needed on the board to complement its existing members
They also think about succession planning for old members rolling off
Compensation Committee
Approve the cash and equity compensation for the C Suite (CEO, CFO, CRO… and any major hire)
Audit Committee
Help pick the auditor and review the financial statements each quarter
Transaction Committee (when getting bought)
Guide the organization through bids, Letters of Intent, and sizing up exit opportunities
They may also work directly with investment bankers if the company is running a sale process or preparing for an IPO
M&A Committee (when doing the buying)
Guide the org through acquisitions they go out and make
Determine price range they are willing to bid and if the target is a solid fit
ESG (Environmental, Social, and Governance) Committee:
Psych! ZIRP phenom
Informal committees that may also exist:
IPO readiness
Are you able to reliably predict the business performance?
Hold mock earnings calls
“Kitchen Cabinet” for disasters (e.g., COVID, wars, Google wakes up one morning and decides to move into your space)
President’s Jackson and Truman were famous for having this close band of advisors on speed dial / carrier pidgeon
OK, now you know who everyone in the room is, we can get to the real meat and potatoes of why you’re there - the materials. What follows is a breakdown of an ideal board agenda.
Something to call out at the very beginning: if your board meetings go for more than ~3.5 hours, something is broken. I don’t care how long you can go without a bathroom break. This isn’t an Ironman or an endurance event. The human brain can only absorb so much information (“here, on slide 217, you can see…”) and anything longer will feel like a slow death march through hell.
At the same time, the goal isn’t to filibuster, or to use a basketball analogy, “dribble out the clock.” If this is your goal, something is also broken. Your board members should have valuable, diverse opinions. It’s your job to pull that out of them with an agenda that positions them to opine.
Ideal Agenda and Flow
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