Critical actions that improve the value of board performance.
This blog will describe one of the most important actions you can take with your board to improve performance.
And that is ‘selection’.
Be careful that, especially for not for profit boards, you don’t select whomever you can get to agree to serve. Or even, that you can only get those who are passionate about your organization’s sector.
Reacher higher the next time a position becomes available. Yes, there should be term limits and most organizations have that practice embedded by now. And here is the thing: the actual work of the board needs to be understood by all the members on the board. The work is not to act as another layer of management. It is not to be a rubber stamp authority either. Of course, it does need to provide oversight, and evaluate the CEO or ED, etc.
So, the challenge is to how to improve the value of board performance? Start by asking: ‘How do you define and describe the actual work that the board is doing?’ And when does that work become actually useful? How will you know?
The answer lies in how who define the skills you select for.
There are boards that make sure they have a lawyer, an accountant, someone from the relevant sector, perhaps an HR specialist, or a marketing person. These are all good skill sets to have around the table but they are not actually the most important ones to have. Select for an understanding and experience with governance.
And what is that? That means asking questions in the interview for their understanding of the board’s role. Such as, ‘what is the role of the board?’, or ‘give me an example of a board you sat on that spent time on the wrong things’. ‘Give me an example of a board that you think was performing its duty. Why do you think that?’
The definition I like is that governors care about the purpose of the organization and management care about the performance metrics. Too often I hear board members making operational suggestions to the CEO! Or asking detailed questions deep inside the performance metrics.
Better to ask questions of the CEO around what new developments are on the horizon and how will the organization respond? Who does the organization serve and how well are we doing that? What measurements can we use to test how well we are serving our stakeholders?
The difference is the level of thinking going on in the meeting. Most boards say they want to get better at strategic conversations. But if you don’t select for governance experience then you face the extra challenge on converting your board (which acts as a management team) into governors.