Ten Things: Dealing with the Board of Directors

I want to continue my effort to post a few articles about basic corporate law issues.  Last time I wrote about about corporate governance.  This week, I’d like to discuss dealing with the Board of Directors (the “Board”).  The members of the Board of Directors are elected by the shareholders of a corporation.  Their job is to manage and supervise the company’s officers and management and to look out for the interests of the shareholders.  Directors owe the shareholders/company a “duty of care” and a “duty of loyalty” while serving on the Board.

The Legal Department interacts with the Board in several ways.  Typically, the Corporate Secretary (the person who manages the operational aspects of the Board along with other duties related to maintaining the corporation) sits in Legal.  Often the General Counsel is also the Corporate Secretary. The Corporate Secretary works closely with the Chairman of the Board and the Governance & Nominating Committee.  The Chief Compliance Officer may also sit in Legal and works closely with the Audit Committee.  Similarly, any significant litigation, contract, acquisition, or other material legal event will come to the attention of the Board and may require its input or approval in some instances.  The Board will take up these legal matters at regularly scheduled Board or committee meetings, or at a special meeting if the circumstances warrant.  When these ad hoc legal events come to the attention of the Board, various members of the Legal Department may be invited to the meeting in order to present the issue to the Board or be a subject matter expert for any questions the members may have.  Any in-house lawyer can be intimidated the first time they meet the company’s Board of Directors or prepare materials for them (even if it’s just responding to an email).  This edition of “Ten Things” will give you some pointers on how to deal with the Board:

1. Do your homework.  If you are meeting members of the Board for the first time (or even the second), be sure to take some time to learn more about them.  The easiest way to do this is to ask people who deal frequently with your Board (i.e., others in Legal, Finance, Corporate Secretary function, etc.).  Some Boards operate very formally, everyone in suits and ties, and stick to a strict agenda/schedule and very specific protocols.  Other Boards are informal, dress casually, and work through an agenda but varying from it often to discuss other things.  Know which type of Board you will be dealing with.  If there is any question, always bet on “formal” because it’s hard to go wrong if you pick that path.  Take your queues from other company employees in the meeting with you.  Don’t be a jokester – that rarely is appropriate and can be the kiss of death in the wrong circumstances.  Do some background research on the Directors.  The websites of most companies, especially publicly traded companies, will contain Director bios, and so will the annual report (Form 10K) and the proxy.  If you are invited to a Board dinner or lunch, knowing a bit about each Director’s background (e.g., their college or where they work and live) can be a real asset and conversation saver.  Learn their names and their roles on the Board, i.e., committees, lead director, activist director representative, etc.  Finally, try to get a sense of their personalities.  Again, this is one where you’ll need to ask people who meet with the Directors frequently.  Most Directors that I have met are great.  They are warm and friendly, super smart, and very dedicated to the company.  Every once in a while you meet one who is not.  Going in to the meeting knowing where the traps are personality-wise is priceless.

2. Understand where your duty lies.  As an in-house lawyer you need to understand who your client is at all times.  Under the ethical rules here in the USA, an in-house lawyer’s client is the corporation.  It is not the CEO or the CFO, it is not any one Director.  It is the company as a whole, i.e., the shareholders’ interests as represented by the Board of Directors.  Your job is to be sure your advice and your actions match up with this obligation to your client.  Watch out for any one Director attempting to influence what you do or how you think based on their self-interest.  While rare, it is something to be on guard for.  If you think you have an issue with any particular Director go talk to the General Counsel or Corporate Secretary (or someone in senior management if necessary).

3. Transparency.  I remember a valuable piece of advice a Board member once gave me.  They said “Do not hide things from the Board.  Be transparent and even-handed in your advice to us.”  What he was telling me was don’t try to “game” the Board or play it cute with your advice and counsel.  Give the Board all the facts.  Discuss the pros and cons of any situation in even-handed manner and do not try to shade things so you can get a certain result from the Board.  And never try to hide things from the Board.  Your integrity and reputation are two of the most important things you bring to the table.  If the Board feels you lack integrity you will tarnish yourself beyond repair in their eyes.  Get all of the potential outcomes on the table.  Do not let the Board get surprised by something they did not know was a possibility.  For example, if the other side in litigation has asked for an injunction that would shut down part of your business.  Be sure that is noted to the Board when discussing or writing to them about the litigation, even if you think there is virtually no chance the court will grant it.  If you’re wrong and there is an injunction (which you failed to mention was one of the claims), you will have a lot of explaining to do.

4. Keep it simple.  As you present to or discuss issues with the Board, don’t overwhelm them with text and legal-speak.  One of the most valuable skills an in-house lawyer can have is the ability to make complex topics simple and straight forward.  You need to learn how to do this to be successful.  This goes for any presentation materials you prepare for the Board, emails discussing legal issues, or other types of memoranda and correspondence.  Writing and presenting as an in-house lawyer is different from being with an outside law firm.   Do not pack your PowerPoint or memo with paragraphs of text or spend time on case citations and detailed footnotes, or use Latin phrases or other legal buzz words or acronyms.  If you have visuals, keep them simple and uncluttered as well.  Whenever you have the opportunity to get information to the Board, think long and hard up front about:

  • What is it that I want/need to say?
  • What information needs to be included so the Board has the full picture?
  • How can I set out and discuss the issues (and my advice) in the simplest manner possible?
  • Am I teeing up what needs to be done by the Board and setting out their options?

Directors have limited time to consider company business.  They already have a ton of material to go through leading up to any Board meeting (board books, financials, draft resolutions, etc.), they usually have other jobs or commitments to other Boards, and they have personal lives as well.  At the meeting, assume they have read your materials in advance and get to the point quickly.  You can even say something like “I’m going to hit a few highlights of the background and then move on to the key issues we need to discuss.  But, if anyone has questions as we work through the materials, please let me know.” Read the room as you present.  If they are staring out the window, pick up the pace and/or move to the heart of what you’re after – ditch the script if necessary.  Everything you can do to be clear and straightforward and not just another lawyer babbling on about things will be noticed and appreciated.  Brevity is your friend.

5. Anticipate questions.  If you are meeting or talking with the Board, odds are good that you are there as a subject matter expert on the topic (e.g., the litigation, the contract, the acquisition).  If so, spend a significant amount of time anticipating what type of questions you might get from the Board and how you will answer them if asked.  This is harder than it sounds as questions can seem to come completely out of “left field” as we say here in the USA.  Place yourself in the shoes of the Directors and think about what questions you would have if faced with the material you are presenting.  What are the 3-4 critical questions that come to mind?  Review everything you have set out in the materials and think about whether anything will “beg” a question or require further elaboration.  If it does, is it really a question you want to beg from the Board?  If not, cut it.  Consider having someone else read the materials and see what types of questions they come up with (whether or not you can do this and with whom depends on the sensitivity of the materials).

6. Honesty.  Closely related to all of the above is the need for honesty when dealing with the Board.  Obviously, you never want to flat out lie to the Board.   This issue often comes up in those situations where you do not know the answer to a question asked by a member of the Board.  Bottom-line is don’t try to wing it or cobble together something that you do not know for sure to be correct (and you definitely do not want to give them an incorrect answer).  Instead, just say you do not have the answer to the question right now but you will find out and report back to them as soon as possible.  It’s okay for this to happen on occasion.  There is just no way to possibly know the answer to every question that might come up (even though you’ve tried to anticipate as many as possible).  That said, if you say “I don’t know” a lot, it does not reflect well on you and it will come across as either a lack of preparation or a lack of intellectual horsepower.  Neither is a good label.

7. Be professional.  When dealing with the Board, you need to be polished but not overly formal.  Some deference is good, but too much makes you look weak.  When you talk, watch out for the “ums” and the overuse of the word “like.”  It is difficult to trust and take seriously someone who sounds like they are in high school.  If you know you are going to be speaking with the Board in advance, i.e., it’s not a surprise call/meeting, practice your presentation or the key points you want to make.  You may be an awesome speaker when you stand up in front of your team and speak off the cuff but don’t try this with the Board.  It is a vastly different experience.  When discussing things with the Board, be prepared to back up your points with evidence and facts.  Show that you have been thinking through the angles.  Likewise, dress appropriately.  You cannot go wrong leaning to the formal side, i.e., suit, sport coat, conservative dress and shoes, etc. – all of which reflect well on you as a professional.

As an attorney, remember to ensure the proper use and preservation of the attorney-client privilege.  Don’t forget to include the members of the Board when you are educating employees and senior management about how the attorney-client privilege works and how best to ensure that documents and emails containing attorney-client privilege material stay privileged.  This means ensuring the Board uses the proper labels, specifically asks for legal advice vs. business advice (and understands the difference), and that the members of the Board do not accidently waive privilege.  Don’t assume just because they are on the Board that they understand how the privilege works.

8. Always be helpful.  As you engage with the Board (and hopefully that engagement grows as you become more senior in the Legal Department), keep an eye open for things that are helpful to the members.  For example, at every regular Board meeting we provided a short update (10 minutes) on any material developments in the law dealing with corporate governance and their duties as Directors (e.g., regulations, case law, articles).  Likewise, if I — or my team — came across something we thought would be useful to our Board members, we would share it, along with a short note explaining why the materials were important.  Of course, don’t over-do it.  This is a “once in a while” type thing and do it only when there is something of real value to share.  Additionally, there are always the basics:

  • Promptly return emails and phone calls from Board members (even if it’s just say “I have your request and am working on it)
  • Understand that requests from the Board usually go straight to the top of your “to do” list
  • Be on time (i.e., early) to meetings and conference calls with the Board
  • Ensure that members of the Board received the meeting materials and have extra copies available in case someone forget theirs
  • If working on a big project that has Board involvement, make sure the right people have your contact details just in case someone needs to reach you

9. Spot risk/have a plan.  One of the most important obligations of the Board is to constantly be on the lookout for risk to the company.  While this usually conjures up images of “bad” things, risk can also mean opportunity, such as the risks associated with the acquisition of another business.  In your dealings with the Board be aware of their need for help in spotting risk (good or bad) and developing a plan to deal with it.  The latter is one thing that many in-house counsel often skip over, i.e., they are great at pointing out risk or problems but not so great at having a plan or potential solution in hand.  Whenever you are dealing with the Board and discussing risks, be sure to have in hand your ideas on how to solve the problem or take advantage of the situation.  For example, the Board is focused on a potential merger but is concerned about opposition from the anti-trust regulators.  One potential way to help solve the problem is to identify experts (economic, others) who have helped companies get similar deals approved in the past and bring those names and those successes to the attention of the Board.  While no guarantee your deal will get approved, engaging outside experts who have dealt with issues similar to those you anticipate having can help a lot both in terms of getting your deal approved and in bringing some piece of mind to the Board that the company is doing all it can to get the deal approved.  For more on risk, see my column “Risk is the New Black” in the April edition of Corporate Counsel Connect.

10. Keep the CEO up-to-speed.  There may be times when a member of the Board reaches out to you directly with a question or a request.  That is generally fine.  In fact, you should be flattered they are coming directly to you.  Regardless, you need to keep the CEO (and the General Counsel) up to speed if this occurs.  You do not want them to be blind-sided by anything going on at the Board level.  Be sure they know not only that a Board member reached out to you but also be sure they know how you responded, including ensuring they get a copy of anything you send to the Board.  This gets tricky is if the request involves some type of investigation of the CEO or the Board member asks that you not tell the CEO about the contact.  The former is actually a bit easier to deal with because there should be a process in place at your company with respect to investigations of employees, in particular senior management.  If you get a request like this, go to your manager for help with how to proceed.  If the request is simply “don’t tell the CEO”, it gets harder and you are now in a tough spot.  How you deal with this will depend on the circumstances and your position in the company’s hierarchy.  The safest play here is to speak with your manager or the General Counsel.  If that’s not a good option, contact outside counsel you trust for advice.


There is nothing here that is overly complicated.  Rather, most of it comes with experience.  And everything mentioned above should be weighed based on how your Board actually works (either from your own first-hand knowledge or information you glean from others).  It can be a bit scary the first time you’re invited to meet a member or members of the Board of Directors.  But, the fact that you are meeting them is a good sign for your career.  Look for opportunities to get in front of the Board.  If you become aware that something you are working on is going to the Board, ask your manager if there is a way you can participate or just “sit in”.  It may not be appropriate but they will remember that you are interested and will likely look for opportunities for you down the road.  If you have your own tips to share or want to discuss anything above, please use the comment feature of this post to share your thoughts with me and the other readers.

Sterling Miller

April 29, 2016

Follow me on Twitter @10ThingsLegal and LinkedIn where I post short articles of interest to in-house counsel daily.  

(If you find this blog useful, please click “follow” in the top right so you get all new posts automatically, pass it along to colleagues or friends, and “Tweet” it. “Ten Things” is not legal advice or legal opinion.  It is intended to provide practical tips and references to the busy in-house practitioner and other readers. You can find this blog and all past posts at www.TenThings.net.  If you have questions or comments, please contact me at either sterling.miller@sbcglobal.net or smiller@hilgersgraben.com).

My first book, “The Evolution of Professional Football,” is available for sale on Amazon and at www.SterlingMillerBooks.com.



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