So far in series on the foundations of board, we’ve briefly looked at “what looks good” in the chairman, the board. There are so many topics we can cover and any suggestions would be welcome. Organizations, whether multinational businesses or charitable organizations, can thrive, prosper, and fulfill the mission you have set for yourself. However, over and over again we see this not happening for a variety of reasons, the main one being bad leadership at the helm. This may be in the form of a weak CEO or executive team, but ultimately the chairman and board must ensure that management is up and running well, and therefore the board must be highly effective.
Some typical barriers to effective governance
Board Quality
The board should consist of a genuinely varied range of individuals, each of whom should be properly competent to serve and bring a unique set of talents or expertise to the table. Additionally, the experience and skill set must be applicable and useful.
Variety is important, too. Diversity in viewpoints, personalities, experiences, abilities, and many other factors, including gender, age, ethnicity, culture, and ability. In order to protect the company against groupthink, blind spots, and creativity, this is being done. However, what can cause this philosophy to be ignored or seen as some form of “tick exercise” is that it is often poorly managed, which inevitably leads to poor communication, lack of trust and destructive behavior and hence , to the inevitable return to the old ways for simplicity, not efficiency.
Information Quality
Despite all the will and systems in the world, it is extremely difficult to produce quality information for the board of directors and the management itself. As obvious as it may sound, the information should inform the members about the activities and tasks facing the organization. This information should be accurate, concise, focused, strategic and highlight key issues, challenges and options. Relevant information should also exclude external points of view, such as industry topics from various media and various networks, such as industry or geopolitical initiatives. Information coming through formal or informal channels is very valuable for the board of directors.
It is always difficult to ascertain the quality of this information – how it was received and whether it is properly directed. Many boards of directors encourage the participation of board members in the development of the reports that come to them, as well as the encouragement of the continuous development and redesign of these reports as the organization, its environment and strategy change over time.
Board Structure
Well-structured advice is vital to its effectiveness. If the chain of command is correct and the subcommittees are functioning well, this ensures that the organization is run as efficiently as possible. Examples such as regular membership reviews and flexible sub-committees that focus on relevant and specific issues help improve the efficiency of the board’s information and therefore its decision-making ability.
It is also crucial to pay attention to how the board performs its duties. To ensure that the board operates effectively, it must have adequate procedures in place. Aspects for evaluation, strategy, decision-making, audit, risk, learning, succession planning, selection, regulation, etc. should be included in these processes. Without it, the board of directors won’t be able to properly balance all of its duties, including making quick decisions and long-term strategic goals for the company.
Board dynamics
Governments perform best when their organizational culture is strong and effective. Sadly, it is not as frequent as we would want. Groupthink, member (and group) dominance, chairperson control, and individual subversion are a few examples of cultures that have bad board performance. Other unproductive council members can be drained of energy, lethargic, and self-satisfied. Sometimes, but not always in a healthy way, dysfunctional persons and activities that can upset the status quo are promoted. Being unprepared or arriving late for meetings and other crucial events for the organization are examples of a laziness and apathy. Boards that flourish typically have good communication skills, promote healthy conduct, welcome constructive challenges and debate, and forbid pointless and harmful tactics. A board is considerably more likely to contribute to an organization’s success if it is self-aware, introspective, and regularly assesses its own performance both individually and collectively.
It’s not simple to run a prosperous, resilient, and expanding organization. To achieve the long-term objectives of your firm, having an effective, clear, adaptable, and influential board may be essential. A board can only be beneficial to an organization if it is composed of high-caliber board members who both as a group and individually offer the most compelling and effective contributions.