by Kerry Tromanhauser
Good governance is vital to the effective running of an organisation, and getting the make-up of your board right, is a crucial first step. Boards are as diverse as the organisations they lead, but there are some key common factors that make the difference between a good board and a great one. While there is no one answer, there are certain things that can put your board in the best position to make a real difference.
Roles and responsibilities
The first thing you must get right is clarity around the roles and responsibilities of your board. The board should be your directors, not your executive team. They have legal duties to meet, and it is important that they understand what authority they have as a board, and what lies with the board committees and where the operational divide is, beyond which sits firmly with officers. Without this, you risk confusion, poor decision making and needless duplication.
Communication is key
A great board will not only have its own opinions, but it will listen to the opinions of all stakeholders when developing the strategic direction of the organisation. It will also know what the team, investors, funders and clients think of the organisation – from its strengths to its weaknesses. It will also test this as it delivers the strategy – to ensure it is delivering as expected and has no unexpected consequences.
It is important that the board works together, has a clearly defined shared purpose and is seen to lead consistently. This does not mean there will not be disagreements within the boardroom and healthy, respectful challenge is essential to robust decision making. But once a decision is made, with the best interests of the organisation at its heart, it must be seen to be unanimously supported if the board is to be credible and the whole organisation is to buy-in to the decision.
Leading, not managing
It is not the board’s role to manage the wider team, rather they should be leading them, delegating effectively and inspiring others to take the organisation forward and subscribing to the agreed culture. This also requires the board not just to agree a decision but to be seen to model the behaviours and norms the organisation has adopted. They need to ‘walk the walk, not just talk the talk’!
Become a ‘learning board’
A commitment from the board on ongoing learning and development is crucial. While the individuals’ knowledge and expertise might be the reason why they were recruited to the board in the first instance, leaders of the organisation must continue to learn and adapt as the operating environment changes. This also highlights the importance of having a diverse board, including creative thinkers and innovators, as this will help the organisation to be more forward thinking and agile when faced with unforeseen challenges.
Keep it strategic; make up of your board
For a board to excel it needs to keep its focus on the corporate strategy and ensure its delivery. To be able to do this, they need to be confident that the executive team and wider organisation have the skills and capabilities, along with the necessary authority to run the organisation day-to-day. This does not mean there is not a role for the board – its wealth of experience can provide not only challenge but also support, improving outcomes corporately and for customers.
An effective board will challenge proposals put forward by each other, and by the senior team. This ultimately leads to better decisions, as the challenges will test assumptions and provide a broader perspective. If the challenge stems from respect, then even the most difficult conversations should be constructive and positive.
Making the most of board meetings
Time is a precious commodity and there is limited time for boards to come together to consider the wide range of issues facing them. To maximise impact, board meetings must be well planned, organised and prepared for. Clear agendas to structure the meeting and robust reporting, providing the right information, in the right format, will maximise the impact of the discussion and prioritise the most important conversations.
Looking in the mirror
It is not enough to monitor the performance of the organisation, it is also vital that the board looks at its own performance. A great board will carry out both individual and collective self-assessments annually, briefly consider its performance whenever it meets and open itself to external scrutiny at least every three years. This should be seen as a pro-active opportunity to clarify roles, reflect on successes and challenges alike and consider what can be changed to further improve impact.
Board turnover and succession planning
Having fixed terms of office for board directors will ensure that the board remains reinvigorated and diverse. While it seems counterproductive to change a board that is working well, if a strong process for succession planning is in place, there will always be a good combination of experienced and new board members balancing the need for continuity and fresh thinking.
If you are working towards making your board great, speak to us to see how we can help you take that next step forward.