Is the corporate board broken? An article in Executive Grapevine last week suggests that it is. Let’s look at the evidence and ask, if the board is broken, how can we make it better?
What’s wrong in today’s boardrooms?
As the article points out, ‘The Board is the beating heart of your business’ and your directors ‘the ultimate tool in combatting the fierce current global climate and extending the innovation that keeps your company relevant’.
Despite this, some of the decisions taken by boards in the past, even in some of the world’s biggest companies, have been sub-optimal, with outcomes that have negatively impacted the business.
So why is this? Boards should comprise some of the brightest and most successful people in the business, with relevant experience and skills. And yet their decision-making can be lacking.
As the article says, ‘Sometimes, the decisions have been poor because of a lack of adequate information, yet sometimes the decisions have been poor because the Board itself isn’t fit to make the decision’.
If this sounds familiar, what can you do about it?
- Regularly evaluate your board’s performance
Carrying out regular board evaluations is recognised best practice. Regular feedback is one of the steps identified in this blog on ways to avoid a boardroom malfunction. Taking time to assess how each meeting has gone, and more broadly, regularly reviewing the performance of the board overall, is a valuable exercise.
- Focus the discussion
The board needs to consider the key issues and deliver productive outcomes. It can be hard to marshal this disparate group of – very senior and generally opinionated – people into agreeing strategy. Discussions need to be focused and managed. Decide how much debate you really want on your board to optimise decision-making.
There is a role for the chair here; a strong chair can make a huge difference to a board’s ability to make constructive decisions.
- Ensure your board members keep learning
Board development is vital. The BBC cites ‘complacency’ as one of the deadly sins of business and the article claims that ‘A business leader who denounces further learning won’t be a business leader for much longer’.
Putting in place a board development plan can help to ensure your directors are always developing. A plan should include clear KPIs and accountabilities, and the article suggests that ‘If your members push back, then they may not be an ideal fit for the Board’.
- Hold regular meetings
Although your board members are all busy, regular meetings should be non-negotiable. As the article says, ‘Without direction and structure, your business and your growth will stagnate’.
This encompasses not only the time for the meetings themselves, but the time needed to follow up on and action key decisions. Read more on how to make time for meetings in our blog on How CEOs can best manage their time.
- Structure the information your board members receive
The article claims that while board ineffectiveness can have many reasons, ‘if you feel that meetings are productive, it may well be the case that they simply aren’t being documented and actioned well’. Maybe surprisingly, good minute-taking has been hailed as the secret behind good board decisions, so that may be worth exploring if this is an area you can improve on.
Giving members the information they need prior to meetings is equally important. Make sure your board members can access the information they need and ensure you’re briefing board members effectively for meetings.
With a ‘failure to do their homework’ identified as one of the five mistakes board directors make most, it’s essential that boards make sure their members have all the information they need.
Even if your board isn’t broken – these fixes will help
Your board hopefully isn’t broken. But if you take on board these tips, you can be sure you’re putting in place some best practice strategies to ensure it is the best it can be.
As in the fifth point above, ensuring your board has the information it needs to make decisions is vital. Finding out how your directors want to receive information is an essential first step.
Ask them what they need to know prior to meetings and how they prefer to receive this.
- What length should board packs be?
- Do your directors prefer to receive them in hard or soft copy? Most boards will have a mix of preferences. Can you deliver papers in ways that suit everybody? A good board portal will allow you to provide paper packs for those who want them, while giving online or pdf options for those who prefer to read in soft copy.
- When should they receive packs to make sure they have time to read and digest the information included? Last-minute changes to papers can cause delays – particularly if you deliver hard copies by post or courier.
Directors’ time is limited – and costly. The preparation they do for meetings plays a large part in ensuring that your board is as efficient as possible.