Sitting on a board of directors should be one of the most satisfying experiences one can ever achieve, yet for some it is a total nightmare. Serving on a board should be such a pleasant, educational, and a rewarding experience. When the opposite is true, it can be excruciating, energy-draining and very frustrating. In this instalment let me dwell on some of the characteristics that should be found in a competent board.
In most organisations — whether it is a public corporation or a youth organisation — the composition of a strong leadership, always leads to a well-run company and a well-functioning board. With a confident and mature CEO, there will be a strong lead director or chair of the board. Both of these positions must be filled with well-meaning and strong individuals of integral character. If not, the leadership on the board must be instrumental in weeding out unqualified board members and those board members who are disruptive and unprepared. Some may need coaching and others may need to be plainly relieved of their board duties.
A well-run board requires diversity of thought, experience, gender, and culture. If all of the board members think and act alike, their decisions will reflect their lack of diversity. I do not only mean culture and gender. Well run boards also reflect diversity of age, experience, and industry that include complementary skills such as risk management, channel distribution, sales, marketing, human resources, compensation, information technology, finance, fundraising, and industry vertical knowledge. A board needs to be clear about duties, roles and responsibilities of it’s directors in the recruiting process to ensure that applicants expectations and the company are aligned.
Leave egos at the door
When a board consists of directors who have the company or organisation first and foremost in their minds and feel they do not have to prove themselves most often they make the best contribution to the company. These characteristics are usually present in confident, seasoned executives who have accumulated several years of board experience. All directors need to have their interests aligned with the company. When there is the existence of venture capital investor appointed directors, these directors need to be focused on the strategic direction of the company. This is often not the case and usually detracts from having a well functioning board.
An organisation with a strong strategic direction, where the CEO, chair, directors, and management are most qualified and focussed is most often the organisation that will have a strong board and will be successful. It does not matter whether it is a start-up, a charity or a learning institution. When the board is holding the CEO accountable for this strategic direction and the directors are not getting their fingers, or worse, noses into the weeds or micro-operations of the company, the best chance of success exists.
Most often, we have boards where the director lacks governance experience and requisite educational skills. Often, such directors, compensate for this by having detailed knowledge of the operations of the organisation. When directors are mature, experienced, educated and confident in their board roles the resultant board is most often well functioning and highly productive.
Strong committee structure
A well-run board will have strong committees with good leadership that will do the heavy lifting on specific board work that will include committees such as audit, compensation, governance and risk. Accountability is one of the keys to success in any organisation. Then based on the need and complexity of the company there will be committees for IT, cyber security, investment, finance and merger and acquisitions when required. The directors will be confident in discharging their duties when they are presented with well-framed reports from the committees of the board.
Gone are the days when a board member can hold down 10 or 15 board roles. As an individual board member, you have to be committed to the agenda and work of the board you sit on. A board member should have the time and schedule flexibility to be able to attend between five and nine board meetings and another five committee meetings a year and well prepared for those meetings by reading the pre-meeting materials.
A director cannot deliberate and participate in a discussion without being prepared. In the case of a large bank board or some such big corporate entities, the suggested time commitment is half of a full-time career position. Even if you are on the board of a private company that is raising finance or being acquired, the time commitment can be substantial.
Therefore to ensure your board functions well, you require board members who have the proper amount of time and schedule flexibility to discharge their responsibilities properly.
When these characteristics exist whether it is in a private company or multi-billion dollar company, the participation in such an efficiently run board of directors will be both a rewarding and educational experience.
Robert Mandeya is a training consultant and communication in management advisor, and a personal coach in leadership and professional development. Email: firstname.lastname@example.org, email@example.com.