By Carol Coughlin CEO & Founder: BottomLine Growth Strategies
While there is not a standard definition of what makes a high-performing board, the very questions we explored in Part 1 of this series provide good clues for figuring out what areas might need to be improved to increase your board’s performance. The question, of course, is how.
Here are 5 actions that have been proven to put boards on the road to high impact and performance:
1. Create a compass point
It’s important to approach the task of improving board performance in a big picture, structured manner. Otherwise, changes will be made here and there with no clear sense of what the board is really trying to accomplish. This requires determining what “high-performing board” means for your organization. In other words, develop your own criteria for high performance.
This is a key first step and you’ll find many ideas for what your criteria might be within each of the remaining four actions.
2. Put strategy first
A common quality of high-performing boards is a strong orientation toward strategy. A sign of this is how much meeting and between meeting time is given to strategic questions, considerations, and challenges. In fact, high-performing boards spend as much time looking at the road ahead as they do looking backward at quarterly reports, budgets, compliance, and the like. While these are incredibly important for good governance and oversight, matters concerning the future strategy and direction of the company are absolutely essential for thriving.
To facilitate a stronger strategic orientation, make sure your board is working under your company’s strategic plan and that they had input and approval over it. If this is not the case, it may be time to revisit the strategic planning process as a complete team with board input and direction.
Of course, doing this won’t make a difference if your board isn’t already comprised of strategic thinkers. So, also make sure that a good component of your board members are strategists. The last thing that will lead to high-performance is a board stacked with tacticians.
Rethink your board’s agenda. Many board agendas look much like they did a century ago, which is why so much time is spent looking at the past. Instead, create an agenda that ensures future-focused activities receive enough time, if not in each meeting then over the course of a year. People join boards because they want to make a difference in the organization.
Remember that looking at the past, present, and future are all important aspects of governance—but if your board isn’t putting much more time looking forward, it simply can’t be high-performing and will continually struggle to keep your company innovative, profitable, and competitive. Many board members complain that their boards do not discuss strategy enough. Set aside specified time at each board meeting to discuss strategic matters.
3. Apply engagement across the board—literally
The more rigorous a board is in everything it does, the more high-performing it will be. This includes rigor around:
- Board processes
- Self-assessment and planning
- Accountability and expectations
- Director recruitment and development
- Boundaries between the board and operations
High-performing boards adopt high standards in all of these areas, but rigor is not only about strict adherence to quality. Engaged boards are extremely thorough and exhaustive in their approach to their work.
4. Define quality participation and contribution
Boards must have perfect clarity regarding their roles and responsibilities, including how they are expected to contribute to the success of the company. High-performing boards carefully define these in a formal document to give members a standard for judgment and to ensure continuity.
While all board members must produce according to agreed-upon standards for the board as a whole to be high-performing, it is especially important that the chair is a high-performing individual, as he or she is responsible for setting the board’s performance culture.
Here are the cornerstone qualities of a high–performing chair:
- Understands the business
- Is a strategic thinker and great mentor
- Focuses the board where it matters
- Meets individually and frequently with non-executive directors
- Establishes an open, trust-based relationship with the CEO
- Expertly facilitates discussion, drawing out opinions and valuing contrarian voices
- Knows how to frame sensitive topics
- Prioritizes reducing decision bias and has the knowledge to identify bias factors, as well as the tools for overcoming them
- Encourages diversity of viewpoints, does not dominate conversations
- Makes tough decisions
- Inspires and invigorates leadership
- Communicates well with stakeholders
5. Put in the time
High performance requires a larger time commitment from board members—and on the highest-performing boards, that extra time is spent primarily on strategy. This takes us right back to all the points under #2 (Put Strategy First), but it’s important to also think about time separately because it will impact who is selected as a board chair or member.
For example, board chairs should meet with the CEO on a regular basis as well as when their counsel is needed. Board chairs or members who are active CEOs of their own companies can become distracted by their own challenges and not have the available time to put toward their board work.
This is one reason transparency regarding expectations and asking (what can be) difficult questions during the vetting process is so important. Recruitment is time-consuming and expensive. If you don’t uncover the realities of an individual’s time availability before they are offered and take a board position, you may end up with a talented board but no chance of actually leveraging that talent.