This is the sixth installment in the Year in Governance Series from the In-House Subcommittee of the ABA Business Law Section’s Corporate Governance Committee. Each month, the series will share key tips on a different corporate governance topic. To get involved in the Corporate Governance Committee, please visit the committee’s webpage.
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Whether it’s for a regular meeting of a board of directors or a special meeting, a public or private company, a well-crafted agenda provides a road map for your board to be informed, engaged, and strategic. Thoughtful agenda drafting facilitates efficient and productive meetings, limits waste of meeting participants’ time and energy (both in preparation and during the meeting), and ultimately helps your board fulfill necessary governance requirements.
- Understand the “why”: Each item on the agenda should have a purpose. When planning, ask yourself if the item is for approval, discussion, or awareness. Understanding the “why” behind each item will help you determine the presenters, time allocation, and priority in the meeting flow. In addition, a clear purpose helps directors prepare appropriately in advance and stay engaged during the meeting.
- Consider the list of attendees: Attendees at each meeting should be carefully selected. Whether attendees are senior leadership, auditors, counsel, board support, or external speakers, their presence should be placed logically and efficiently. It’s important that each attendee add value to the discussion and not just fill a seat—or worse, inhibit discussion. Often topics with guest presenters are scheduled at the beginning of the agenda so they can leave the meeting after their presentation, preserving time for the board to discuss on its own. Also, note who should be in the room when the board is receiving legal advice, as the presence of participants not directly involved in the matter may compromise attorney-client privilege.
- Prioritize topics: Determine which topics should have priority and how their overall flow impacts the meeting. Strategy, operating results, major investments, and risk oversight are more important topics than routine compliance and governance updates. Place topics that require the most attention within the first hour, when directors are most engaged. Defer routine items to the end of the agenda or to the read-only section. Certain foundational topics should be placed earlier in the agenda if the plan is to build upon the content in later presentations. Often, it’s easier to keep all approvals at the end of the meeting to avoid disrupting the discussion flow.
- Timing is everything: The time allocated for each agenda item is important. Reserve more time for significant or complicated items, and build in buffers for unexpected discussion. Thoughtful time allocation also helps directors understand the importance of each item from leadership’s point of view. Take learnings from previous meetings and adjust accordingly. If a particular topic consistently runs over, reassess how much time to allocate to the same topic in future meetings. Also, remember that agendas are discoverable documents. Weighty items, like risk oversight, should not be allocated a small amount of time or placed in a read-only section.
- Review with stakeholders: The board agenda should be previewed with the chairman of the board, and the committee agendas should be previewed with the committee chairs. Additionally, key members of leadership are essential in driving the board agenda, including the chief executive officer and the general counsel and secretary. Each committee also has critical stakeholders to consider: For the audit committee, the chief financial officer and chief accounting officer play significant roles. For the compensation committee, the head of human resources and the head of executive compensation play significant roles. The corporate secretary should ensure that all the right stakeholders weigh in on each agenda as appropriate. Remember to include any external stakeholders as appropriate—for example, independent auditors or compensation consultants—and be sure to start the review process weeks in advance of the scheduled meeting.
- Make efficient use of a read-only section: Read-only sections are the perfect place to include material that you want your board to know and understand but that does not require a formal discussion. Common items in read-only sections include dashboards, summaries on discrete issues, and background reports. When planning, be sure to remind presenters that they may include material in the read-only section that can supplement the content in their main presentation. Remember to advise directors to read these materials; directors are deemed to have knowledge of these materials if later produced in a litigation or board records request, regardless of whether it was part of the main discussion.
- Destroy drafts: Agenda drafts are discoverable documents and are typically included in the bundle of documents produced in a stockholder demand for books and records. As a result, it’s imperative that the only version of the agenda discoverable is the final version shared with the board or board committee. If drafts are available and subsequently produced, changes in topics, timing, and participants could lead to incorrect assumptions about why certain items or presenters were changed.
- Utilize board and committee planners: When crafting agendas, use an annual board or committee planner that can help you visualize the timing of topics throughout the year. Schedule deep dives on important topics like cybersecurity, succession planning, and crisis management purposefully and predictably. This helps set expectations both at the board level and with your senior leaders. Prioritize certain topics over others depending on business needs, requests from directors, or leadership’s preference.
- Hone descriptions of topics: Agenda descriptions should be precise and simple. Be sure to indicate if an item will require approval. Vague terms like “review” or “update” without an additional description may lead to a disconnect between the presenter and the board. Well-written descriptions enhance transparency and can also help in reviewing corporate records in future years.
- Note deviation from the agenda in the minutes: Despite a well-planned agenda, it’s natural for changes to happen. For example, a presenter may be running late, so their item is moved to another section of the agenda, or the board decides to skip an item because it wants to allocate more time to another. Changes are fine. However, it’s important to document these changes in the minutes, so in the future, there are no discrepancies between the agenda and the minutes. There should be no room to guess what was discussed, when it was discussed, with whom it was discussed, and for how long, so be sure the minutes capture any changes.
The views expressed in this article are solely those of the authors and not their respective employers, firms, or clients.
