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Allan Grafman
President
All Media Ventures

Board Calls: Make Them Weekly

New market realities require that directors respond to greater expectations. Here is a simple and impactful step boards can take today that will provide greater value to their companies.

By Allan Grafman

Ed Note: A longer version of this article, which enumerated several additional benefits of instituting a weekly board call, was published in the First Quarter 2009 edition of Directors & Boards. For an electronic copy of the full-length article, email Editor Jim Kristie at jkristie@directorsandboards.com.

Every director, board and company must look for new tools to survive and thrive in this era of governance stress and financial failure.

Boards should consider a short weekly call of 30 minutes or less as a timely step to take. This simple action can be implemented now — today. It will yield immediate benefits, be consistent with governance trends for greater board oversight, and is not an undue burden on directors.

This weekly board call is a quick update. It is a forum for board members to review open items and take steps toward informed decisions. It is the antithesis of the all too familiar routine where a director receives a large quarterly book with far too much information to digest before a quarterly meeting.

For success, a short weekly call requires a strong chairman who can move the board through material quickly and assure that this update call remains focused. This is not a time for presentations or speeches. Save those for the regularly scheduled quarterly board meetings. Think of this as the ‘refueling’ that takes place regularly, not the heavy ‘tune-up’ that is a quarterly affair.

Here are some of the reasons why a weekly board call should be initiated by directors who wish to be more impactful in building shareholder value at their companies:

• Board Effectiveness Increases: A weekly call facilitates more contact and conversation among board members around important topics. This level of interaction helps a board come together in an informal manner, something not possible at more formal quarterly meetings. The result is a more cohesive membership, one less likely to fracture during difficult decisions. Further, if there are significant personality or policy differences, these issues will arise earlier and have more opportunities to be resolved.

• Removes Big Surprises: Weekly calls assure that directors are always current regarding important activities and issues. At most, the board is only a few days away from all material facts about any issue that may come before it. The ongoing dialogue and process allows for advance thinking and preparation. Even better, there is much less likelihood of an undesired ‘big surprise’ during a quarterly ‘dog and pony’ presentation.

• Modest Commitment: A weekly call of 30 minutes is all it takes. While it does require a concerted effort at the onset to keep the call to 30 minutes or less, the call quickly becomes an established routine. If your chairman is not able to take the board through key material in 30 minutes, someone is talking too much.

• A Record of Exercising Fiduciary Duty: I recommend that short summary notes be prepared by the chairman and filed after each weekly call. These notes provide concrete, specific and effective documentation that the board is providing fiduciary guidance. Such documentation could prove invaluable should your company and board come under a legal challenge. Imagine the power of having a long history documenting directors’ oversight to refute unjustified lawsuits alleging the contrary.

• Reduces Email Chatter and Clutter: When all directors know that there is a scheduled weekly board call there will be less email chatter trying to set a meeting or call, and less email clutter that can be misunderstood or, worse, used as incriminating evidence against the company. Your email in-box will thank you.

A weekly call may not be needed when a company is putting up record profits and all is well. Unfortunately, ‘record profits’ by companies where ‘all is well’ describes a lot of boards and companies that have recently failed. The point is that every board should at least consider a weekly call.

Allan Grafman advises private equity investors and media companies on strategies to monetize content assets and consumer brands. He is president of All Media Ventures and operating partner in Mercury Capital Partners, a private equity fund. He is a director of several private and public companies.

He can be contacted at allangrafman@allmediaventures.com.