5 Steps to become a Highly Effective Board
10 February 20
All organisations want success. However, success requires great leadership and especially so from the board. Boards define the purpose, determine the strategy, manage the risks and set the culture of organisations.
To do this well and create the platform for organisational success, boards must strive to perform at the highest level possible. This needs continual reflection on how they can work more effectively.
Here are our five steps to become a highly effective board.
1. Focus on the 4 key tasks of a board
The IoD defines the 4 key tasks of a board as follows.
- Setting vision, mission and values
- Setting strategy and structure
- Delegate to management and monitor performance
- Exercising accountability to shareholders and/or being responsible to relevant stakeholders
Boards should spend most of their time on these 4 key tasks. This will include making major decisions relating to the delivery of the strategy and ensuring the major organisational risks are identified and mitigated. Boards should only spend time on operational matters so they understand the internal and external operating environment.
2. Evaluate Board and Director Performance
Did you know that both the UK Corporate and Charity Governance Codes require boards to review their performance annually? Regardless of any regulatory standards in place, it’s just good practice to review performance.
Indeed, performance feedback should be a regular feature of all board activity. This can be informal at the end of each meeting and through a more formal and structured performance assessment.
The codes recommend a structured annual review with external input every three years. Typically, this entails an online assessment questionnaire on how the board is performing and individual feedback for directors. A more extensive approach would be for external observers to attend board meetings and provide a detailed report of what works well and what could be improved.
Whatever the approach, making time for detailed and meaningful reflection is an essential feature of an effective board.
3. Invest in Board Development
A board is a team and all good teams invest in their development, individually and collectively.
Through the informal and structured evaluations outlined above, identify the main development needs of the team and the individuals. This could be workshops on specific areas such as finance or risk, improving team dynamics or coaching for individual directors.
Once the development is identified, ensure it is put in place.
4. Run dynamic meetings
Many board meetings are run along familiar lines and in the same way over long periods of time. However, just because they’ve always been done that way doesn’t mean they always must. In fact, reassessing how a meeting is run could be a big step towards greater effectiveness.
Meetings should be structured to focus time on the most important items, encourage meaningful contributions from all directors and enable sound decision making. The Chair has a crucial role and it’s vital they have the skills to run great meetings. Read our chairing meetings toolkit for more guidance.
5. Stay connected to the organisation and its operating environment
Most directors will know they need to focus on the strategic rather than the operational. However, the risk here is directors will not understand the operational realities, inside and outside the organisation.
Some board time could be allocated to insights that enable directors to remain connected and when senior managers are presenting on big items, they should be challenged to explain the operational reality and implications in detail . Directors should also spend time outside of board meetings with managers and staff, particularly at the front line.
Not only will this help boards to stay connected to the organisation, it’s also likely to lead a more effective board.
How Gallanach can help
Gallanach supports boards in all sectors to perform better through a range of board development services. The services are led by Gallanach MD Norman Blissett, an experienced board member, Chartered Director, Fellow of the Institute of Directors and Fellow of the CIPD.
All our services are tailored to the needs and budget of the organisation.
Contact us to find out more.