You might not have an effective board if…your board approves every item on the agenda at every meeting with little or no discussion. Board work gets off to a good start when everyone around the board table agrees that their work drives the organization’s vision and mission. Parliamentary procedure and best practices give the board a format for doing their work. The structure keeps them focused on their purpose. When directors all work towards the same end, their work can be highly effective. With all the right tools and structures in place, it seems that boards should run like clockwork. So, how do boards lose their effectiveness? Sometimes it’s good to get back to the basics.
Every board has its own dynamics and culture. When individual members come together, their work can be quite powerful in the boardroom. When internal dynamics are too weak or too strong, the board’s work can quickly derail, losing its effectiveness. What are the characteristics of an effective board that keeps the board’s work respectful and productive?
Corporations and non-profit organizations hold to the vision, mission, and values of the organization with the ultimate goal of serving the interests of its stakeholders.
The leaders of an organization work together to form the organization’s vision. The wording of the vision is important because it creates a picture of the organization’s future—what they want to see happen in the future. The vision statement is motivational and inspirational.
The mission states the organization’s overall purpose—it’s what you do, who you do it for, why you do it, and how it happens.
The organization’s values are what the organization believes—what it stands for and how they expect its representatives to act. Values provide a reference point for all other things that happen inside and outside the boardroom.
Collectively, board members who believe in the vision, mission, and values communicate to others what the organization should look like.
Effective boards don’t micromanage the Executive Director, CEO, CFO, managers or employees. The board’s primary role is to lead and guide the organization through strategic planning with a focus on the future.
In practice, this means that the board needs to establish work plans and priorities. The board agenda should be structured so that directors tackle the most important work first. After addressing critical matters, the board should turn their attention to critical decisions that they will need to make over the course of the next two to three years. The discussions should include evaluating whether the board has the capacity to make those decisions effectively.
Placing focus on strategic planning also means that the executive director’s reports should reflect content on the board’s strategic planning work.
Boards with Diversity
Diversity within a board is important because investors, media, and governmental organizations place board members under a high degree of scrutiny. Boards are taking on increasingly complex issues and they need a diverse board with experience in better understanding risk from all angles.
Having diversity among the board better represents the interests of all the parties within the organization including stakeholders, employees, and constituents.
Diversity among board members takes on many forms. Effective boards have board members with expertise in the following areas:
- Industry expertise
Beyond these areas, effective boards have diversity among gender, ethnicity, or other groups, depending on the organization.
The nominating committee needs to be in the loop with seeking board candidates that fulfill the board’s needs for diversity.
Training and Development
Board development begins with selecting the right candidates. Once candidates accept positions as board directors, offer them the opportunity of a comprehensive orientation. It’s not a bad thing to have board directors with little or no board experience when they have the expertise to offer in other areas. Inexperienced board directors have the potential to be valuable assets to the board, especially when the board assigns them a mentor to guide them.
Effective boards encourage continual training and development. It’s important that board directors know how to read financial and other reports. The board should focus its training efforts towards areas where the board is weak.
The board manual usually spells out the descriptions, responsibilities, and expectations of board members including details about being respectful and professional.
The board chair plays a significant role in setting boundaries for board discussions, which helps to shape the culture of the board. The board chair also sets the expectations for the rest of the board by modeling good behavior. The board chair’s responsibility includes conducting board work efficiently, which includes making sure board members have board manuals, board policies, and that board and committee members submit reports in a timely manner.
How many times have you changed your perspective on an issue after dissecting an issue and taking time to think it through? Annual self-assessments are crucial to identifying strengths and weaknesses among the board. Effective boards perform self-assessments for the whole board and for individual board directors on an annual basis.
Self-assessments should include evaluating skills in following industry trends, building and monitoring strategy, overseeing programs and reports, collaborating with management, understanding board structure, recruiting, participation, time commitment, and assessing attitude. Non-profit organizations should also include self-assessments regarding knowledge of fundraising.
Forming a diverse board can only be effective when the board encourages a culture of inclusion during collaborations. Boards should value communication skills like questioning, analyzing, and evaluating during board discussions. The board room atmosphere needs to be accepting of dissenting opinions while allowing board work to move forward.
An effective board chair guides discussions that are positive and productive. Boards should strive to form an open and collaborative relationship with directors.
Effective boards continually develop a shared and renewed commitment to best practices for good governance and hold each other accountable.
Some Final Thoughts on the Characteristics of an Effective Board
If your board agrees to follow the structure they identified and practice good governance, does that ensure their board will be effective? Structures, agendas, and board characteristics are all subjective to some degree, which is a challenge that all boards face.
Despite the obstacles in maintaining board effectiveness and efficiency, boards need to continually drive their efforts towards effectiveness. You might have an effective board if you strive towards the characteristics of being mission-centered, strategic, diverse, professional, collaborative and are committed to board development and self-assessment.