Building an effective board of directors is a critical part of governance that has a profound impact on the organisation.
While it is important to recruit and develop a well-qualified board, board effectiveness is just as much about board dynamics and working as a team as the expertise and experience individual members bring to a board.
Organisations need skilled, experienced board members to fulfill the mission and ensure strong leadership. Active boards deal with regular challenges and the occasional urgent matter. Tensions can surface when strong personalities clash in the boardroom. Board effectiveness reflects how well boards handle tension and conflict and how they work together to accomplish a nonprofit’s goals.
Speaking on this, an economist, Mr. Tunde Oyediran stated that an efficient and effective board should include a mix of company executives, directors and sometimes external experts, saying that “the ideal board of directors should be interested in the top-level strategic duty, more so than the day-to-day operational activities within the business. Therefore, strong motivation to tackle strategic challenges is a must in a board director.”
According to Oyediran, an ideal board of directors should also have a good understanding of the decision-making process. They should be productive facilitators who stimulate fruitful discussions. For example, effective board members encourage each other to explore various topics and ask probing questions in order to make comprehensive judgments and evaluations.
Steps To Improve Board Effectiveness
The board management performing to the best of their ability is essential to the success of the organisation. These steps will help organization increases the effectiveness of the board and help them lead the business towards its goals.
Clearly define roles and responsibilities; Your succession policy should allow you to select and prepare candidates who can fill the skill gaps on the board and ensure that the whole delivers more value than the sum of its parts. To facilitate this, create job descriptions for each board member, where you explicitly state what you expect of the director from their work with the board.
Examine board structure; Getting the structure of the board correct is a difficult balancing act, but it is essential for board effectiveness. There is no ideal board size that suits every company because it depends on your specific circumstances.
Revise formal operating procedures; Another example of improving effectiveness by not being afraid to challenge traditions comes in the formal operating procedures of your board. You may well have run your meetings in a certain way for decades, but if it is not the most effective way possible, you should make a change.
Keep track of decisions and actions; There should be a frictionless procedure that translates decisions made into actions carried out afterwards. Sometimes this is not the case, and there is a disjointed approach.
Evaluate board composition; There are a number of different considerations to make with regard to board composition. You need a balance of skills, experience, outlooks and attitudes. In addition, gaining better board diversity in terms of gender, race and other considerations helps you to avoid groupthink that fails to fulfil the potential of the business.
Understand board culture; The culture of the board has a bearing on its effectiveness. Are the meetings too formal or too informal? This is an element of board culture that could determine how effective those meetings are.
Engage board members; The chair or CEO can improve the effectiveness of the board by making efforts to engage board members. This could include reaching out between meetings to develop personal connections, organising informal meet-ups to encourage team building, making time to celebrate wins and other such exercises. These activities develop a connection between the board members, encouraging them to give more of themselves to their work on the board and increasing the effectiveness of the board at the same time.
