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Answering my inbox · Issue No. 2
The Board That Only Meets When Something's on Fire
On governance hygiene, and what “the business is doing fine” hides.
The Question
A founder wrote in
“Our board hasn't met formally in eighteen months. We text when something's on fire, and otherwise we talk when we talk. The business is doing fine. Is that actually a problem, or is ‘formal governance’ something people worry about because it worries them, not because it matters?”
Fair question, and one I hear some version of more often than you might think, always framed in the same "the business is doing fine" logic. Here is the unvarnished answer, from someone who has watched exactly how that logic runs out.
The Manhattan Read
"Fine" is a performance measure, not a governance measure, and that is exactly the confusion that lets this go unaddressed for eighteen months instead of six. A board does not exist to make the business run well. That is what the entire operation is there for. A board is there to create a decision-making record and a shared accountability structure that survives the moment your memory, your relationships, or your goodwill stop being enough to hold the company together on their own.
Every company has one, on paper. What you cannot tell is whether yours functions as a governance body or merely exists as a group chat with equity, and you rarely find out until the moment that distinction gets tested. Those moments are specific and predictable: a financing round, a co-founder's exit, a dispute among shareholders, an acquisition offer, a regulator's question, a succession event. Every one of them asks the same question first. What did the board actually decide, and when? If the honest answer is "we talked about it in March, I think," you do not have governance. You have a collective memory loosely held together by anecdotes, an oral tradition of sorts, and oral traditions do not survive due diligence.
I have watched a merger stall on exactly this gap, not because the business was doing anything wrong, but because nobody could locate the record of a decision that was six months old. Here is the test I use with every client. If you cannot produce minutes, resolutions, or a decision log for the last eighteen months, then whatever "the board" agreed to has no paper trail. That is not a philosophical problem. It is a liability the moment a dispute, an audit, or a financing round asks you to prove it.
The Manila Read
Informality feels like trust. "We know each other, we do not need the paperwork" is a real strength in a founder-led or family enterprise. It is the malasakit that makes people stay through the hard years. The mistake is not the closeness. It is letting that closeness substitute for structure instead of sitting alongside it.
A board that never meets formally is not protecting the relationships in the room. It is deferring the conversations that actually threaten those relationships, compensation, succession, underperformance, dilution, until they arrive as crises instead of agenda items. And crises are exactly when relationships get damaged, because there is no established process to absorb the disagreement. It lands directly on the people.
Real stewardship means building the structure now, while things are calm and everyone still likes each other, precisely so the relationships have somewhere to stand when they are tested later. That is not bureaucracy replacing trust. It is trust, made durable.
The Move
Do not wait for "formal" to feel necessary. Schedule four board meetings a year, minimum, each with a written agenda and a one-page record afterward: decisions made, who is accountable, next check-in date. It does not need to be elaborate. It needs to exist.
And do one more thing this month. Reconstruct the last eighteen months of hallway decisions into a retroactive record, while people still remember them accurately. That is your floor, not your ceiling.
Where This Shows Up
This is precisely the kind of governance hygiene gap my team closes quietly, on my watch, months before it becomes the thing a buyer's due diligence team flags, or a boardroom disagreement turns personal for lack of a paper trail to fall back on.