how to have a great 2 hour board meeting?


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Sales & MarketingLately I’ve had a lot of requests to help with board meetings: in particular, preparing board slides and giving guidance on how to make the meeting more meaningful for all those in attendance.

how do you have a great two hour board meeting?

I’m not going to go into the technical specifics of a board of directors, nor do we need to bring out Robert’s Rules of Order to help with running it,  I want to look more at you, the CEO, what do you want out of your board meetings?  But before we get to the meeting, and the agenda, let’s look at the board itself.

You probably have a board of five members each representing a skill set that you value:  someone who represents the customer (e.g. someone who would buy your offering and knows what will resonate), a few who represent “the money” (e.g. your venture capital folks) and are going to hold your feet to the fire on your financials/projections, someone who has CEO experience that can give you advice through tough times, and yourself.  You brought this team together because they will provide you strategic guidance, support and connections.  You value their opinions.

So why do my meetings feel so tactical instead of strategic? and go on for-eh-ver?

Well, fault lies on both sides.  The rookie mistake I see often is the CEO who brings every member of his executive team, each with their own slides, to show the board how awesome and effective they are.  At ten slides a piece, and two minutes a slide, that is over an hour gone right there on an operational overview of what happened in the past.  Add in discussion - your board has lots of experience and are there to question and provide an opinion - and a deep dive on each department will consume the entire meeting and then some.

what should a good board meeting look like then?

Just follow these easy tips for quarterly meetings (in Agenda format so that the minutes follow easily):

  • Bring meeting to order: now, of course, you have already “pre-sold” what is going to occur at this meeting.  Boards hate surprises and they hate being surprised by bad news even more.  If it’s really bad news then actually reach out to speak to them in advance - this way they have calmed down by the actual meeting and you’ll have a feeling for what should be addressed to make the meeting more strategic.
  • Administrative (10 minutes): this is when you approve the prior meeting minutes, stock option grant resolutions, etc.  This is the easy stuff to get out of the way quickly.
  • Operational Overview (45 minutes):  your actual presentation should only take 30 minutes to go through but you know there is going to be discussion.  For me, personally, a good board deck shouldn’t be more than 20 slides (financials have been sent out in advance): 1 overview, 3 financial highlights, 3 sales, 2 marketing, 2 product, 2 services, 3 covering forecast for next period and remainder of year, the rest is unique to the story you want to tell.  The slides shouldn’t change much from quarter to quarter and helps keep the board in a rhythm of when/where information is going to be provided.  This is an overview (not an operational play by play) that really addresses: where are we at?  what is going right?  what is going wrong? Discuss.  Bring your CFO to help fill in the blanks but you are doing the pitch.
  • Strategic Topic “X” (60 minutes): each board meeting you should have a strategic topic to discuss.  This topic has been mutually determined prior to meeting (see below).  Typically, you have a question or problem that you are mulling over and now you want to present a potential solution and solicit feedback from your experienced board (and then make subsequent changes).  You have provided all the material in advance of the meeting so this is just going over a quick deck and the options you want to discuss.  This is when you really get to use all that board experience you value so much.
  • Suggestions (5 minutes): given where you are at with the company, and how well the strategic topic went, you as a board agree to what the strategic topic should be at the next meeting giving you three months to pull it together.
  • Adjourn - yeah!

So, my young grasshopper, I hope you find this information useful.  Time to retire that 59 slide .ppt deck, stop playing ‘fetch and retrieve’ on useless one-time metrics and really get something meaningful out of your board meetings.  Your directors will thank you for it.

valuing convertible debt under ASPE?


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General & AdminSo, here in Canada, most of us little guys have adopted Accounting Standards for Private Enterprise (”ASPE“).  For most it was a non-event but for old school folks like me there was one particular change that had me at “hello”:

no longer being required to value the equity portion of a convertible note

Not to get too retro-grouchy but do you remember when we had to classify the proceeds received from convertible debentures into their liability and equity components using the relative fair value approach? Remember using the Black-Scholes model and discounting debt values?  Oh come on … you must remember the word “accrete” and “accretion” that just sounded like something you should be discussing with your gynecologist.  Ick!  Fortunately, the world will no longer have to be accreted which makes this template on the Business Ready website obsolete.  Why?

per CICA 3856.22(a):  The equity component is measured as zero.  The entire proceeds of the issue are allocated to the liability component.

Giddy-up!  Woohooo!  Finally, accounting is being simplified.  It’s a nice start and I, personally, am thrilled.  Below is the entire text but I encourage you to all to stay on top of all pronouncements should they change.  Cheers!

CICA - Financial Instruments Excerpt (3856), Liabilities and equity:

.20 Except as provided in paragraphs 3856.23, the issuer of a financial instrument shall classify the instrument, or its component parts, as a liability or as equity in accordance with the substance of the contractual arrangement on initial recognition and the definitions of a financial liability and an equity instrument. (Paragraphs 3856.A22-.A38 provide related application guidance.)

.21  The issuer of a financial instrument that contains both a liability and an equity element, including warrants or options issued with and detachable from a financial liability, shall classify the instrument’s component parts separately in accordance with paragraph 3856.20. (Paragraphs 3856.A30-.A38 provide related application guidance.)

.22 Acceptable methods for initial measurement of the separate liability and equity elements of an instrument to which paragraph 3856.21 applies include the following:

(a) The equity component is measured as zero. The entire proceeds of the issue are allocated to the liability component.

(b) The less easily measurable component is allocated the residual amount after deducting from the entire proceeds of the issue the amount separately determined for the component that is more easily measurable.

The sum of the carrying amounts assigned to the liability and equity components on initial recognition is always equal to the carrying amount that would be ascribed to the instrument as a whole. No gain or loss arises from recognizing and presenting the components of the instrument separately.

directors liability vs. moral obligation?


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General & AdminIn the past Business Ready has given guidance on how to calculate Director’s Liability and what it entails.  In British Columbia, under the interpretation of the Employment Standards Act, director’s are liable for wages owed (and accrued vacation) but they are not required to pay severance.  Which begs the question for debate:

is there a moral obligation that should be included in directors liability?

A client recently asked me to calculate the directors liability for an upcoming board meeting.  I provided two numbers:

  1. Directors Liability (legal obligation): in this case included wages owed but not yet paid, the employer portion of payroll deductions, accrued vacation, and HST still outstanding.
  2. Total Liability (moral commitments): this included the director’s liability but I also included severance, employee payables (e.g. outstanding expense reports), customer liabilities (e.g. the technical support collected but not yet “earned”) and any lease commitments we had (e.g. how much to get out of them).

Why did I offer the second calculation?  The meeting was simply to see where the calculation was at (they still have two months of burn in the bank) so they really didn’t need it but if you were to have an orderly wind down wouldn’t you want to take care of your people, customers and those who were willing to extend you, the little guy, credit?  I thought so.  It’s just a thought.  Discuss.

PS back in the day, Tanya and I used to call these calculations “the Lalonde” plan (small companies have ears in the walls so you don’t want people to hear that you are calculating the wind down … it makes them nervous).  Why Lalonde?  Ah, yes, an old Finance Minister, Marc Lalonde, who implemented wage controls to stem inflation.  It’s finance humor during tough times.  Okay, not funny.  Hah!

i <3 the english language


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Services & SupportHave you noticed that the “word of the year” is always a popular term or one coined by a celebrity?  Didn’t notice w00t in 2007? (I just can’t seem to let that one go).  It was no better this past year when the Oxford press (both UK and US) chose “squeezed middle“.  Really?  I guess I should be happy it beat out the others up for consideration (e.g. “bunga bunga”).  Then of course there is the mind-numbing array of acronyms that exist; fortunately for me there exists many sites willing to help decode.

In today’s world of IM, text message, twitter and other mediums that promote truncated/abbreviated words I guess the erosion (yes, I know it is evolution but I feel we’re going backwords) is inevitable.  But the dictionaries aren’t helping either.  I recently received an I’m that ended “nyte!”.  I scoured all the acronym websites to figure it out.  I even came up with my own: “now you’re talking, eh?”.  After a good ten minutes I realized the sender meant “night”.  Sigh.

So, this Valentine’s Day let’s show words some love.  Whole words.  As they were meant to be.  Let’s fall in love with the english language all over again.

That’s right: love.  Not <3.  Perhaps say: “Well, I’m afraid it’s getting rather late.”  Not l8tr.  Just a thought.

And, please, if you find this post “ridic” (ree-dick), although you may “aprec” (a-preesh), keep it to yourself, “k” (kay)?  and instead let this wash over you:

Variations on the Word Love, by Margaret Atwood

This is a word we use to plug
holes with. It’s the right size for those warm
blanks in speech, for those red heart-
shaped vacancies on the page that look nothing
like real hearts. Add lace
and you can sell
it. We insert it also in the one empty
space on the printed form
that comes with no instructions. There are whole
magazines with not much in them
but the word love, you can
rub it all over your body and you
can cook with it too. How do we know
it isn’t what goes on at the cool
debaucheries of slugs under damp
pieces of cardboard? As for the weed-
seedlings nosing their tough snouts up
among the lettuces, they shout it.
Love! Love! sing the soldiers, raising
their glittering knives in salute.

Then there’s the two
of us. This word
is far too short for us, it has only
four letters, too sparse
to fill those deep bare
vacuums between the stars
that press on us with their deafness.
It’s not love we don’t wish
to fall into, but that fear.
this word is not enough but it will
have to do. It’s a single
vowel in this metallic
silence, a mouth that says
O again and again in wonder
and pain, a breath, a finger
grip on a cliffside. You can
hold on or let go.