How to run a brilliant board meeting for a startup
The founder's guide to running a brilliant board meeting. Get expert tips on what documents you need, how to prepare and...
Corporate governance is no-one’s idea of fun but as the founder of a startup or small business, you’ll need to hold board meetings.
These regular meetings might seem like just another item on your already very long to-do list but done right, board meetings are an opportunity to review progress, present ideas, assess risks and make strategic decisions to keep your company on the path to success.
In this post, we’ll explain why board meetings are so important for startups, when to hold them, who should attend, what to include, and how to make the most of them. This is essential reading for founders just starting out, and a refresher for experienced entrepreneurs.
A board meeting is any official meeting of the directors of a limited company.
At these meetings, the directors discuss topics such as performance, strategy, key performance indicators (KPIs), and new investments or initiatives. Board meetings are important opportunities to talk about higher-level plans and make sure everyone is on the same page.
Board meetings are different from general meetings which are attended by shareholders as well as the directors.
The management of the company is almost always delegated to the board of directors (this is set out in your company’s Articles of Association).
This means that, as a starting point, all decisions need to be made by the board, either unanimously or by a majority vote at a board meeting. In reality, this can quickly become too much for the board so they will often delegate their management powers to other parts of the business.
Even if you delegate management responsibilities to your team, board meetings help you stay in regular contact and agreement with your directors, and this helps your company stay on track to reach your goals.
At board meetings, you can discuss and vote on decisions. You can discuss strategic topics such as how to allocate your budget and whether to expand into new countries, and administrative matters such as company policies and whether to set up a share option scheme.
When the board makes decisions that affect the company, these are resolutions and directors will vote to pass them. The topics you discuss, points raised and decisions made are logged in the board meeting minutes.
There’s no minimum number of board meetings prescribed by law, but directors should meet often enough to make sure that they are meeting their obligations and statutory duties as directors.
It’s common for startups to make one of the board meetings every year an annual review of progress against targets and to discuss high-level goals.
To make sure all your board members can attend, you’ll want to invite them to the meeting several weeks in advance – but there’s nothing in UK law which says how far in advance you need to notify members about a board meeting. Your Articles of Association might specify a minimum amount notice, or say that the notice should be ‘reasonable’.
Sometimes you might want to call a board meeting at short notice if you need to make an urgent decision, for example when you’re fundraising.
It’s good practice to schedule your board meetings for the year in advance, and share the dates with directors so they can put the dates into their calendars. And towards the end of a board meeting, remind attendees about the dates for the next meetings.
In the past, companies usually held board meetings in person, at the company’s HQ. Nowadays, it’s more common to hold board meetings online. This can be far more practical, especially if your board is dispersed geographically (or there’s a pandemic).
Your company Articles of Association will specify whether you can hold a board meeting virtually. Many early-stage startups use the UK government’s model Articles – which permit the company to hold board meetings online.
You’ll need to set a location for the meeting – if you hold the meeting online, you can list the location as the place where one or more of the directors join the call. For UK companies, the board meeting location should be in the UK.
The model Articles state that if directors won’t be ‘in the same place’ for the meeting, then you have to let them know how they should communicate with each other during the meeting. Given that your board members will be familiar with online meetings, it’s sufficient to simply send them the link to join the meeting.
To download guidelines on good practice for virtual board meetings, visit the The Chartered Governance Institute
It’s fine to hold your board meeting virtually but from a practical standpoint, it can be a good idea for a quorum to be physically present in the same location as the chairperson. This way, even if there’s a technical failure and some of the directors drop off the call, your meeting can still go ahead.
For more about quorum, see below: Who should attend board meetings?
Senior Legal Associate,
All board members are invited to board meetings – your board is made up of all your company directors. Your directors can be one or more of the following:
Some of your senior managers such as co-founders, CFO, COO, Head of Product and Head of Legal, might not be directors of the company but you can choose to invite them to some or all board meetings. Your senior team members can present the company’s finances, product roadmap or milestones and KPIs, taking some of the pressure off you and being present to answer questions from board members.
Importantly, you must have enough directors present to reach quorum. Otherwise the meeting isn’t a board meeting and you can’t pass board resolutions. If your company is an early-stage startups using the model Articles, then your quorum is two, or you can decide to set quorum at more than two. If your company has only one director, make sure your Articles set the quorum as one.
Because board meetings are formal, you’ll need a Chair to run the meetings. This role could be carried out by one of the existing directors of your company, or you could appoint someone else if your company’s Articles of Association allow it.
Your company’s Articles of Association will say whether you need to appoint a permanent chairperson who will chair all the meetings – most early stage companies don’t, but you’ll need to list someone as the Chair on the board meeting minutes.
The Chair must:
Note that for 2, 3 and 4 in this list, the Chair doesn’t actually need to do these admin tasks themselves, they just need to make sure they happen.
In larger companies, the chairperson is expected to give impartial advice and support to directors and, like any company director, they must act in the best interests of the company, even if that conflicts with their own interests.
There’s no statutory requirement for private limited companies to hold board meetings, but it’s best practice to hold regular meetings to make sure the board members can meet their legal obligations as directors of the company.
If your startup is a limited company, you should arrange a first board meeting as soon as possible after you’ve incorporated your company. At this first meeting, the directors can complete any remaining incorporation formalities, clarify their duties and set out the aims of the company.
If your company has more than one director, when your company is up and running, it’s likely you’ll need to bring the board together regularly, and when you do, there are some legal requirements you’ll need to stick to:
On our agenda:
✔ Better board meetings
✔ Automated admin and forms
✔ One-click secure document sharing
Your board meetings are an opportunity to get your directors together to talk about plans and strategy, make significant decisions and nail down company policies.
You can discuss anything at all with your board, but you’ll want to make the most of their time by raising only the most important topics. You’ll need to decide what to discuss beforehand so you can create a clear agenda, and share it far enough in advance to give everyone time to prepare.
Here are some common topics which startups and small businesses discuss at board meetings:
The best board meetings are organised well in advance, with a clear agenda and objectives. Read more on how to get ready for a board meeting in our post: How to run a successful board meeting
In the old days, companies used Word, Excel and email to create documents for board meetings, register attendance, write minutes and communicate with the board. The volume of documents and complexity of mustering directors meant that managing board meetings was time-consuming and needed meticulous filing.
Nowadays, it’s much easier to create documents and keep track of your board admin with software and online services. Some software focuses on creating board packs (the agenda plus supporting documents) and sending the packs to directors, other tools focus on logging minutes and actions.
Because board management is a vital part of your corporate governance, every SeedLegals member has board tools included in their membership.
With SeedLegals Board, you can:
Want to see how easy it is to use SeedLegals to organise your board meetings and store the records? Book a free call with one of our experts and we’ll show you around.