5 things you need to know about what makes for a great board ...
A board can be a strength or a weakness to your organisation. For the most part an effective board is one that supports management in the implementation of the organisations strategy. They know what needs to be done because of them understands the role they play. A bad board is one that really does just turn up for a cup of tea, asks questions that they think show they know what they are talking about and who spend more time talking about themselves than they are focussed on the problems at hand.
Of course, you want the former and not the latter. In all reality the majority of boards are full of well-meaning people that do want to make a contribution but because the expectation has not been set up front about what role they play their ability to do the job is at risk from day one. When you are forming a board of directors or looking to refresh your current board you always have to keep in mind five golden rules:
1: Map out the skills you need on your board and always move towards a skills based model. Organisations need different types of skills as they grow and change which is why identifying the key skills required is so important. Each skill set you acquire onto the board will therefore be carefully aligned with the organisations strategy and business plan
2: Ensure each board member has a job description. Just like employees have job descriptions that outline what they are meant to do so too should board members have a J.D. The J.D will be clear in terms of the expectations of the board member and outline how they can best support, using their pre-determined skills, the execution of the business plan or strategy
3: Make sure board members are inducted: You need to have an induction process that introduces your new board members to the organisations business plan, its structures, operating procedures and structures. This will ensure that when it does come time to review such documents at board meetings each member will spend more time on the quality questioning of reports as opposed to trying to understand the why and how things came together. Importantly, each board member MUST know the organisations constitution, articles of incorporation or trust deeds.
4: Board performance should be reviewed: it is important that boards be reviewed on an annual basis. One of the ways this can be done is through peer review while another is a process whereby the board will dedicate a portion of one meeting per annum to review the contributions of each member. What this will do is enable an organisation to change members who may not be performing or attending meetings as well as giving the board the opportunity to succession plan for current members and transition in replacements.
5: Time is precious, harness board members the right way: the problem many CEO’s have is they fail to have quality engagement with board members. By that I mean they try and involve some boards members in pretty much everything without realising that what’s actually happening is the board member is getting turned off. When you want a board member to do something make sure its something that can actually do. For example if you want to raise capital and need a contact don’t just ask the board member for the contact, ask them to help you develop the pitch and support it. That’s because the board member will know the person you will be pitching to and can provide valuable insights into what they may be looking for. Also, when a board member gives you advice and insights – take them. Don’t think you always know best.