This week we were chatting about some of the boards we’re working with. We were teasing out the differences between the inspiring ones and the boards which are struggling. We’re certainly convinced that the Chair has a key role in leading board brilliance – they set the tone and lead by example. We came up with our top 10 things that those inspiring boards do when they are well led:
1. Understand their role and responsibilities
Great boards are packed with board members who are really clear about their role and their responsibilities to the organisation. They know they are there as directors, rather than an executive team, and are committed to fulfilling their legal duties. There is a clear understanding of the authority that lies with the board, and what has been delegated to board committees or staff.
2. Lead, not manage
Great boards lead the organisation. They delegate effectively, have honest conversations, are committed to the organisation, can inspire others and are creative and innovative, particularly when it comes to problems solving.
3. Engage with others
Great boards talk, and more importantly, listen to others. They know what staff, investors, funders and clients think of their organisation, and value their opinions. This is demonstrated by stakeholders having a real say in the strategic direction of the organisation.
4. Provide strategic, rather than operational support
Great boards know the difference between strategy and operations, and stay much more in the strategic realm. That’s not to say they don’t oversee performance. However, great boards really focus on strategy and policy areas, and are confident that the staff have the abilities, aptitudes and delegated authority needed to ensure operations run smoothly.
5. Have regular board turnover and great succession planning
We all have a tendency to resist change, particularly if you have a great board that’s working well. However, study after study has shown that a more diverse board makes better long-term decisions. Great boards plan for this by having fixed terms of office and regular board turnover to introduce fresh thinking and new opinions.
Allied to regular board turnover is the need for strong succession planning. Great boards have a balance between fresh, new board members, and those who have been there for a while who hold knowledge of the history of the organisation. Both are needed for a really effective board.
Perhaps the most important task for a board is to choose the organisation’s CEO. Having the right person in this key role is vital for organisational success. Great boards plan for this by having open communication with the current CEO, developing internal candidates, and spotting potential external candidates.
6. Commit to ongoing learning and development
There is no doubt that the best boards are those that are committed to ongoing development of their own members, both as individuals and as a team. This ensures that knowledge is up to date with modern governance requirements, that skills are continually developing, and it also sets a great example for the rest of the organisation from a ‘learning board’.
7. Get the right information at board meetings
Great boards are those that know what information they need to make decisions, and insist on getting it in the right format, and at the right time. They ensure that the senior management team develops a robust reporting framework, and make sure information presented is accurate, complete, focused and understandable.
8. Work as a team
The best boards we work with are those which have a clear sense of shared purpose, even when they have healthy disagreements about the best course of action. Knowing that your colleagues have the best interests of the organisation at heart leads to great team spirit among the board team. They also tend to enjoy their role a lot more!
9. Challenge appropriately
Whether senior managers are part of the board, or are reporting to the board, there is a need for healthy challenge in the boardroom. Great boards have frank, open, and respectful conversations to get the best results. The boards that develop a culture of healthy challenge, both among board members and of the senior management team, make much better decisions, as they test assumptions and the information presented to them.
10. Review their own performance
While a vital element of board work is ensuring the organisation as a whole is performing well, it’s also really important to review the work of the board regularly. Great boards carry out a self-assessment review at least annually, and have it externally facilitated every 3 years. It’s a great way of reminding everyone of their roles, reflecting on what’s going well, and getting agreement on the actions needed for further board improvement.
We’d love to know your views. What else do you think sets exceptionally good boards apart?
Some useful reading –
- How to Lead: Wisdom from the World’s Greatest CEOs, Founders, and Game Changers (Free with Audible free trial)
- The Oxford Handbook of Corporate Governance
- Speaking as a Leader: How to Lead Every Time You Speak…From Board Rooms to Meeting Rooms, From Town Halls to Phone Calls (Free with Audible free trial)
- The New Directors Handbook: How to become more confident, more effective, more quickly
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