In my Board review work I’m often approached by Chairmen who tell me their Board is operating well, is contributing positively to strategy, has a well thought-out, forward-looking calendar, has compliance and risk management under control and has implemented a succession planning process resulting in a Board of dynamic and diverse composition.
They then ask me how they can use the Board review process to take their Board to the next level in performance and contribution. Which questions might they ask in a time-efficient manner that will provide the best insights necessary to take the most effective steps?
My response is that the most value will be provided by constructing questions that address three different, though interrelated, high leverage areas:
- The value the Board provides
- The leadership of the Chairman
- The relationship between the Board and the CEO
Given most Boards are busy, choosing one question from each of these broad areas should serve Chairmen well in gaining the insights they are seeking.
Examples of such questions are:
Value addition or creation
Value can come from a variety of sources eg composition, diversity of the Board, strategic insights, access to networks, interaction with external stakeholders, specific capabilities etc, so the question should spark a dialogue about the sources of value creation and how the board can or should contribute.
Questions to provide insights into this area include:
- How does this board create great value for the enterprise?
- What changes in composition, size, diversity, tenure will help us to add more value?
- How can we contribute more to the strategy of the organisation?
- What assistance can we as a board provide in networking or alliances?
Asking any one of these questions will result in a broad ranging discussion ranging from the capabilities required for the future to changes in the way the board works or in how it interacts with the CEO and senior team.
Leadership of the Chairman
My view is that the Chairman is the single greatest influence on how the Board conducts itself. It is incumbent on chairmen to seek out information that will help them be as effective as possible. Depending on the current mood of the Board and the state of the business and industry, I would recommend one of the following questions to provide insights to this area:
- If you were Chairman what changes would you make in the way this Board is being led?
- Can you please identify what support you can provide to the Chairman in leading this Board?
- What changes does the Chairman need to make (leadership style, dynamics, discussions etc)?
- How can the Chairman use their strengths to greatest advantage?
- Where should the Chairman devote their time and effort most to lead this Board most effectively?
Inspiring the CEO and senior management team
Boards often focus on ensuring that the CEO does what he or she is paid to do ie monitoring performance and adherence to the agreed strategic plan, and this results in the Board (immediately) challenging any deviations.
Another approach is to adopt a challenge mindset that reflects a desire to create a legacy. Simply by thinking about how to inspire the CEO and senior team to be “faster, stronger, higher” a Board can move its focus from checking the rear view mirror to scanning the external and internal environment to seek opportunity.
Questions that spring to mind are:
- What does this Board offer the CEO and senior team in the way of inspiration?
- How do you challenge/inspire the CEO to go beyond the numbers and seek greater innovation?
- What are you doing to enthuse the CEO about the next big idea (eg M&A activity, disruption to the supply chain, innovative products and services, different HR practices, refinancing, R&D) for the company?
- What has the Board done to review customer needs, understand new and current markets, invest in digital “savviness” so that it can provide greater insights for the CEO and senior team?
A path forward
If the Board chooses one question from each of these three areas and faithfully answers the questions it chooses, the responses will provide it with a roadmap for how it can achieve a new level of performance and contribution.