Disruptive Board? Take these 4 steps…

The right board can be a powerful asset to your business…

Keeping strategy on point. Overseeing managerial performance. Ensuring controls, structures and governance are in place.

A well-balanced board gets you access to expertise that your business needs by tapping into complementary skill sets (think Financial, Legal, HR, etc.).

But what happens when the board isn’t performing the way it’s supposed to?

And how do you know when it’s time to intervene or get assistance?

Here’s my 8-point checklist for assessing if your board is a problem that needs to be addressed:

Top Traits of Disruptive Boards

1. Board Members get involved in the everyday operational activity.

2. Lack of clarity on the roles of individual directors and the board as a whole. Role ambiguity slows decision-making and causes unnecessary director conflicts.

3. Poor process management hinders effective board preparation, meeting management and communications. This results in indecisiveness and a lack of urgency on critical challenges facing the organisation.

4. Lack of alignment and agreement on company strategy causes disinterest among board members, who then simply default to tackling regulatory and compliance issues. Poor strategic alignment also hampers a board’s ability to prioritise issues and set their near-term agendas. This often causes board disruption and sends damaging signals to financial markets.

5. Poor team dynamics fracture boards and lead to power struggles. Like any effective working group, a board should be comprised of professional peers who respect and work well with each other.

6. Board composition is a serious impediment, if not done right. Today’s challenges require new perspectives and skills. But boards cannot often objectively evaluate their makeup to determine if they have the right people and skills at the table.

7. Particular board members or the company founder dominate board discussions and stifle all attempts to change and modernise the company.

8. Board members who are simply too distracted by operational and financial issues facing their own companies to make any significant contribution (again, poor board composition).

Are you seeing any of these issues with your board? Then it’s time to step up and take action…

4 Steps To Fix a Disruptive Board

Step 1. Clear communication

Honest, clear and regular communication is the foundation for optimal board performance. This one is on you. You can’t expect board members to know the business inside out like your management team. Use concise updates covering the key issues (instead of book-length reports of financials). Never surprise your board. To be effective, they need to know what’s going on – the good, the bad and the ugly. And if you need help, ask for their advice. It’s why they’re there.

Step 2. Manage your board

Just like a team, you need to proactively manage your board. Both board members who dominate the conversation and board members whose input is lacking can impact board productivity. If members of your board aren’t contributing constructively, it’s time you approach them about how you can work more effectively together. Try hosting a social event to have the conversation in a more relaxed environment. And if all else fails, consider asking them to leave.

Step 3. Get Focused

In board meetings, your focus dictates your outcome. Your job is to keep the discussion focused on the key issues. Instead of asking open-ended questions that can prompt excessive discussion, try to present concrete solutions to problems. Ask for immediate feedback on potential solutions. This way you avoid spending time on minor issues, compliance or administrative matters. Your busy board members will appreciate keeping on topic and on time. Go into the meeting with a simple agenda and get closure on each topic before moving on.

Step 4. Annual board evaluation

Once you’ve taken responsibility for the first three points, it’s time to turn it over to the board. Put in place an annual board self-evaluation. You might look at some of the following: What’s working and what’s not? Have problems arisen and have they been dealt with? How is the board working together? Has feedback on performance been collected and acted upon? Ask the hard question to get to the heart of the issues hampering effectiveness.

How To Build An Effective Board From Scratch

Some of you reading may be in a position where you’re thinking about setting up a board but don’t know where to start.

Choosing the right board for your business can be critical to your success. Here are my top considerations for starting from scratch:

1. What does your business need?

Think about the type of expertise and skill sets you need to complement your business. Generally, this will start with financial, a subject matter expert within your business (i.e. an executive who knows your business operations well) and marketing (digital experience is certainly a bonus).

Subject to the nature of your business, other positions may include another entrepreneur in a non-competitive stream, legal, quality control, supply chain/logistics, HR or a key representative from a group reflective of your customer base. Generally between 3-6 board members are recommended.

2. Keep it conflict-free

Ensure there are no conflicts of interest for any members in relation to their current role and/or other board/committee positions.

3. Rules of engagement

Develop your rules of engagement and fee structure. Define participation, attendance, and role of the chair and board members. Clearly express the expectations of behaviour, including how decisions will be reached and recorded and the focus areas. The Tricker Model is a useful model to review.

Building a board is a high-leverage activity that’s important to get right. Without the correct structures (legal, governance and performance), boards can quickly turn into more of a liability than an asset.

Reach out today for a complimentary and confidential discussion of your unique situation. BespokeHR may be able to help.

At the very least, I’ll be able to point you to the right hands that could save you years of frustration.

Quiz: Which celebrity leader are you?

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Go and take the quiz now!

Any questions?

If you have questions on this topic or any others, feel free to reach me by email or set up a free one-on-one consultation session, or drop me a comment below.

Thanks for sharing!