Since 1997, Boardroom INSIDER has focused not on the big topics of governance — the kind I try to address at corpgov.net — but the little topics of boardsmanship, the real-world concerns that directors urgently ask about. In his new Kindle published book, Boardroom Q&A: Ralph Ward Answers Your Toughest Boardroom Questions… even those many boardmembers are unwilling to ask. Well qualified himself, much of Ward’s advice comes from a wide variety of top experts.

At a cost of less than $8, it has to be the most cost-effective tool available to boardmembers. Every company should buy a copy for all their board members. I’ll give you a small sampling of snippets from just two of the many Q&As.

Q: What is a “Board Observer?” “I’m founder of a company developing several software applications. Our prospects look good over the course of the next couple of years, and we’ve attracted a new round of financing from an area VC firm. The firm wants to add a member to our board of directors (currently four of us). This seems reasonable, but they also want to include a ‘board observer’ from their firm. I’m fairly new to dealing with VCs, and haven’t encountered a board observer before. How does this work, and are there concerns I should be aware of?”

A: When a venture capital firm wants more board presence than there are practical board seats available, they often seek to add an “observer” to board meetings. They have the right to attend and participate in board meetings, and to receive board information. The observer represents the VC’s interests, but without a vote or legal fiduciary duties… Though they can’t vote, an observer’s tag-team status with a VC director from the same firm lets them “greatly influence the decision making process,” notes VC Doug Park, head of DYT Advisors…

Further, Mark Radcliffe, an attorney with DLA Piper, points out that “the normal director fiduciary and confidentiality rules don’t apply.” A board observer is free to blab sensitive material from the boardroom (even to competing companies that are also in the venture firm’s portfolio). Worse, director legal privilege protections won’t apply to them either. This should not dissuade you from accepting a board observer from the VCs, but should prompt you to discuss solid rules with the firm, and to get them in writing.

Q: Give Your Board a Tour of the Company Website
“I’m corporate counsel and secretary with a mid-sized public company. I often have outside members of the board asking me to send them information that’s already easily available on our website. Further, when we publish news on our site, the directors never seem to know about it. I’ve thought about giving the board a walk-through of our website — any ideas?”

A: …Fay Feeney, chief of the RiskForGood.com governance consulting firm, specializes in bringing the world of tech into the boardroom, and offers a smart plan for giving your board a “tour of the company website.” …“I start by suggesting the directors go to Google, put in the company name, and see if your website comes up first,” says Feeney. …Do drop-down menus for each item show what’s inside, without having to navigate away? … “Think of the ‘plain English’ requirement for filings,” suggests Feeney. Further, how easy is it to navigate through things like 10K’s and quarterly filings? …“telling a story, with a compelling proposition.” …Do you give bios for each director (with board tenure, committee assignments, and maybe even equity owned)? …Check to assure that news releases are up-to-date (if the latest is from six months ago, does that mean the company is stagnating?) Also, is there easy media contact info (email address, telephone #’s)?

The book is quick and snappy. Although organized into nine major headings, you can dive in anywhere and benefit. It is a great little book to keep handy on your iPad or Kindle. Read it on your next flight or anytime before you need the answer to that puzzling board question — or, afterwards, if that’s the best you can do. As an activist long-term shareowner, I certainly appreciate the book’s final word where Ward quotes Thomas Wheeler, Former CEO, MassMutual Financial Group:

I believe the thing we’re most responsible for [as directors] is strategic discussion on the company. I didn’t find enough of that in boardrooms. Strategy is difficult — you’re dealing with unknowns, and it’s harder to grasp. But it doesn’t have to bump up against the routine disclosure stuff. If you don’t have enough time to discuss strategy, then you just have to make the time. Remember, you’re there to represent the shareholders.