Musings at Altitude

Over the last decade, I’ve participated in more board meetings than I care to admit, either as an executive on a team briefing the board or as a board member.  In almost every board meeting I’ve been part of, the attitude of the board was influenced primarily by the attitude of the team both leading up to the meeting and during the meeting itself.  Only rarely was a negative attitude of the board at the start turned to positive by the end of the meeting.  And even more rarely was a positive attitude of the board turned negative during the coarse of a board meeting. 

I’ve been privileged to watch some tremendously talented people “work” their boards.  The influencing process starts weeks before the board meeting convenes and it ends shortly after the board meeting adjourns.  In companies that are working through investment capital as they build product or establish competencies in a service business, the good leaders realize that the information provided to the board in the build up to the meeting is critical to set the tone.  If the board perceives strong stewardship of their investment, they come into that board meeting with excitement for what is going to be presented and they are rarely disappointed.  If the board perceives waste or spending in advance of plan, they come into the meeting with concern and caution, and the job of the leader becomes incredibly challenging to change the perceptions and the tone of the board. 

In companies that are beyond the investment phase, the attitude of the board is typically determined by their belief in the acceptability of the income being delivered.  If they believe that the net income is appropriate based on the industry, the market, and the phase of the company, then optimism abounds.  If they believe that the net income is flawed in some way (even if large in raw numbers), then those concerns will come out at some point during the board presentation.  Good leaders will recognize the possible questions that will be raised based on the numbers that they will present, and they’ll begin to steer the thinking of the board to the rational reasons for the numbers to be where they are.  Good boards in turn will drill down on those numbers to determine the believability and acceptability of that story, and they will reach harmony with that good leader before the board meeting adjourns. 

In reality, even those companies that are beyond the “investment” phase are still investing.  Every penny they spend that could have been put to the bottom line is coming out of the pockets of their investors…instead of cash in, it’s cash not going out.  Good boards can see through the spending and come to their own conclusions about the level of income that should be returned to the investors.  Good leaders can recognize whether the board can or can’t sense the required levels of spending, and they will in turn guide the board to the appropriate level of spend to meet the stated expectations.

But back to attitude…I enjoy board meetings where the passion and the stewardship of the team comes out and the appreciation of the board is clearly conveyed.  When the company is doing phenomenally well and the executive team comes into the board meeting flat (for whatever reason), the attitude of the board is muted.  Typically, the board members don’t do well as cheerleaders, so if the team members are flat, the entire meeting is flat.  When the company is struggling and the executive team comes in with confidence and optimism, that rubs off on the board and the board picks up on that confidence.  However, on the other hand, if the executive attitude is arrogance rather than confidence and irrational exuberance rather than optimism, that drives scrutiny instead of confidence from the board regardless of the state of the company.

When I’m a board member, I prefer to be briefed by those leaders who understand how much influence they have on my attitude.  In a sense, they are selling the board (and thus me) on the performance of the company and their performance as leaders every single time they interact with the board.  For those leaders I really trust, when they are up, I’m up.  If they are down, I’m down.  For those leaders I’m yet to trust, when they are up, I ask quite a few more questions, but I typically leave optimistic.  For those leaders I don’t trust (some of you are probably asking “why are they leaders then” – good question!), when they are up, I’m skeptical, and when they are down, I know deep trouble has arrived!