In my last article I found myself in the boardroom and today I remain there, following my invitation by Strathmore University Business School to be a panelist on their “Leading the Board” programme.
In what follows I will refer to the main issues that emerged, and I’ll start by reporting on our easy consensus over the stark fact that holding a board position in this era is so much more challenging than it used to be. Not only do we find ourselves in uncertain and complex times, ones that require unprecedented agility, but cumulative laws and regulations have become frighteningly explicit about the onerous responsibilities of individual board members for the wellbeing of the organisations they lead. The consequence? They are no longer positions of glamour and prestige.
With expectations of directors at an all-time high, the positions have become transformatively more demanding. There’s the obligation to take care of the interests of all stakeholders, and ethically at that. Then compliance is the word of the moment, as a result of which those who sit around the boardroom table must constantly be assessing risks and learning more about how to discharge their responsibilities appropriately.
To ensure compliance they must be up to date with the latest legal, financial, technological and other trends, while at the same time not being so constrained by these that focus on performance is lost. And in this age of social media they never know when some threat to organisational reputation may suddenly emerge, requiring instant assessment and response.
The task of bringing their colleagues together in navigating these turbulent waters belongs to the board chair.
And here too the panel discerned some clear trends. Given the increasing focus on transparency and accountability, board chairs cannot allow their teams to be mere rubber stamps for management’s recommendations. But equally, they must not arbitrarily impose their views on others but ask questions and listen openly. And this they must do with each other and with management.
Chairs must develop teamwork between directors, so trusting relationships form that enable the building of genuine consensus. The panelists emphasised that where unresolved conflicts exist boards cannot make proper decisions or add serious value. So they must also spend informal social time together away from board meetings to complement their hours in formal meetings with formal agendas. Comprehensive board induction is essential too, covering both the hard and the soft elements of the director’s role.
In all that we aired, sharing healthy values and behaving with emotional intelligence were deemed critical, not least on the part of the chair, so that consensus could emerge by “negotiating to win-win.”
An interesting point about how the chair manages time at board meetings arose from a question posed by one of the participants who asked how one deals with a board member who consistently talks too much. It led us to suggest that prior to each board meeting the chair and CEO must agree on its purpose and agenda, as a result of which the time needed for each element and the overall length of the meeting can be proposed by the chair at the beginning of the meeting. As far as the talkative director is concerned, the chair would probably need to have a word with the time-consumer offline, doing this in their role as coach.
This led us to the need for annual board assessments, through a process – not unduly heavy – whose purpose is continuous improvement. It includes reviewing the board as a collective; the chair and individual members; and the board’s relationship with the CEO and management generally.
As important as any other success factor is the quality of the relationship between the board chair and the CEO. The two must engage in regular close consultation, developing mutual respect and accepting that each must motivate and engage the other.
One of my fellow panelists rightly concluded that membership of a board is above all a privilege. It is a position of trust that requires the holder to be available and to contribute, in a spirit of giving back.
Board members are there to make wise decisions, to add value and to leave a legacy behind them when they eventually step down. Still up for it?