Are you an executive reporting to a board of directors? How do you perceive this body of people? Are they helping or hurting you in achieving the objectives you have set for the organization?
Or are you a director? How do you evaluate the performance of the executive team you have appointed to manage the business over which you ultimately are being held accountable by your ownership group?
Sadly, many executives complain that their board does little more than inhibit management discretion and cause extra work for staff. Many directors complain that management is not utilizing their individual and collective talents to the full extent possible. As a result, no one is happy.
So what can we do about this?
There are four board leadership roles that must be present in every governance situation for success to be achieved. Success means that the board is empowered and enabled to add value to the organization and move beyond their watchdog role.
The four roles collectively represent the pillars of governance advantage. These are roles that are jointly shared by the senior executives and the directors of the board.
The recruiter role ensures that the board is composed of qualified directors with a mix of skills and backgrounds. Having the right directors can open doors and broaden the thinking of the senior executive team.
The recruiter role also ensure that the right CEO is appointed. Ram Charan, a Harvard governance expert, suggests that up to 60% of corporate performance can be attributed to finding the right CEO to lead the organization.
The informer role relies heavily on the CFO and the CEO to communicate and immerse directors with only sporadic involvement in the important matters of the business. The informer filters the minutiae and delivers credible insight into the operating performance and compliance matters. Delivering the right level of information will allow the directors to “keep their noses in, but their fingers out” according to Jim Brown, another governance expert.
The conductor role is a joint conversation between the chairs of the board and various committees and the respective senior executives to set the meeting agenda. What gets on the agenda gets discussed. Unfortunately, many agendas overly emphasize less important matters leaving little time for discussing matters pertaining to strategy and the development of talent.
The facilitator role recognizes that group dynamics have an important role to play in the decision making processes inside the boardroom. The business of boards is achieved by seeking approvals that should be neither be forced nor granted too easily by all the directors. A master facilitator will give each director an opportunity to be heard while guiding the group toward consensus.
To learn more about the pillars of governance advantage and explore ideas on improving your next board meeting, look for our course Behind Boardroom Doors: Achieving Governance Advantage.
This was a very informative course, detailing the activities of the board, and how the interaction of the directors occurs, both with and without management. – Keith Johnson (Director SOX Compliance at Waterjet Holdings)
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