Designing Your Board for Maximum Value and Impact
Published on July 11, 2024![](https://realizesolutions.ca/wp-content/uploads/governance-meeting.jpg)
Any group of people can hold meetings, make decisions, get some things done, and say they’re a board. But that doesn’t mean they’re effective.
The difference between a board that just shows up and one that adds maximum value is having an idea of what “good” looks like. Value adding boards shape what good looks like in relation to the purpose of their role and intentionally design their work and time to meet their vision of success. Without this, some timely decisions are made by the board at best. At worst, the board is a group of seat warmers making little impact, or a group that get in management’s way.
What does “good” look like?
A board’s role is to ensure the health and strength of their organization’s ability to meet its purpose. This role is conducted in relation with management, members, and other stakeholders.
Assuming that foundations such as good ethics and dynamics are in place, a value adding board knows that good looks like. It:
- Has clarity around the organization’s purpose, the board’s role, and management’s role in helping fulfill that purpose.
- Is able to stand independently and strategically from management – this includes developing their own practices and conducting their work with proactive professionality.
- Has the belief and commitment to designing how they spend their time and how good governance is achieved within their context.
Notice how this list doesn’t include the tasks typically attributed to boards doing well (i.e., hiring the CEO, approving strategy, review financials, etc.)?
All those tasks are outcomes of a board understanding their role and what it takes to fulfill it; they are not the role itself. Even when conducting these tasks, the board can waste time if they aren’t aligned on how to conduct these areas in relation to their role. Without keeping the purpose of the board’s work in mind, all these tasks simply become compliance exercises and missed opportunities for the board to increase their impact.
A good board is proactive in developing their understanding of what good governance is and is also committed to actively designing it. By being proactive boards can better see early signs of when an organization needs to pivot, be a trusted sense-checker for the chief executive, and bring a positive dynamic of collaboration and tension to their work.
Proactive boards can better see early signs of when an organization needs to pivot, be a trusted sense-checker for the chief executive, and bring a positive dynamic of collaboration and tension to their work.
Why doesn’t your board add more value?
Take a moment to reflect on your own board. What value does your board bring to the organization? If your best examples are “they planned/showed up to an event” or “they reviewed our finances”, it’s time to question if the board could be bringing more value and what it would take to get them there.
In our work, we’ve heard anecdotes of boards providing great value to their organizations. These boards:
- Thought critically about what they, as a team, needed around the table to maximize their impact and do their best work.
- Flagged something that was on the horizon, forewarning management to start scenario planning.
- Strengthened the organization by holding tough and early conversations around CEO succession.
- Used their expertise to help management determine strategic priorities and new processes or indicated when management needed to rethink their plans and assumptions.
Top two pain points for boards
Every board has different opportunities to be more impactful. Two common areas that can hinder a board from maximizing their value to the organization include:
1. Alignment
The board has not linked practice with how their role achieves the organization’s purpose.
Example: A board hasn’t aligned their work to how the organization meets its purpose. This misalignment has resulted in mediocre board practices that do not push the organization towards innovating better and/or new ways of meeting their purpose. Misalignment has caused the board to skip their foresight responsibility – instead of strategically guiding the organization towards a stronger future, the board either just focuses on the here and now or worse, on the past.
2. Expertise and resources
The board is not skilled at or supported to add more value.
Example: Ideally, a board should be made up of a group of individuals who together, have the perfect combination of experiences and characteristics needed to help guide the organization to achieve their purpose and goals. However, the reality is that boards are often comprised of individuals selected for high level of passion and/or availability, or skills that don’t fit with the organization’s realities or future. While skills can be developed, there must be an accompanying culture of growth and curiosity to invest in the board’s expertise as an organizational resource.
Questions to ask yourself
Of the two, alignment is the most foundational and is required before expertise or resources can be intentionally incorporated to help the board meet its aims.
To achieve alignment between the board’s work in relation to the organization’s purpose, consider:
- Does each director understand what the purpose of the organization is, and why the organization exists?
- How can the board use its understanding of the organization’s purpose to inform:
- How it makes decisions.
- How it spends its time and what gets talked about.
- How it interprets the results and work of the organization.
- What the organization’s priorities should be.
Addressing the pain points: practices to incorporate
Here are some board practices to address problems with alignment and expertise/resources:
1. Alignment
Ensure continuous alignment of the organization’s purpose with how the board conducts its role through:
- Decision making: use the organization’s purpose and values as a north star for all decision making.
- Curiosity: practice questioning how things get done by the board, what gets focused on, and if the board’s work is of good quality and brings the board to higher performance. Set three board goals each year to iterate towards better performance.
- Orientation: institutionalize alignment and role understanding from the get-go. Develop a fulsome orientation that guides directors through the nuances of their role, and pace out the information and reinforce it through the year. A rushed one-time orientation at the start of a term or dumping a pile of documents is not effective.
- Regular check-ins: each time the board meets, host a conversation on where the organization could go and how the board can get them there. These conversations should not only be held once a year at annual strategic planning sessions.
- Prioritize: actively design the board’s time to focus more on what matters and less on what doesn’t. This could take shape in better leveraging consent and forward agendas, or clearing space for impactful conversations.
- Honest conversations: have an honest conversation with the chief executive on what more the board could be doing.
2. Expertise and resources
Useful practices to improve your board’s expertise and resources:
- Performance assessment: assess in-depth the quality of the board’s performance. Use an external third-party to bring an objective and thorough lens to the review and shine a light on blind spots.
- Understanding good governance: spend time developing the board’s understanding of what good governance is. If anyone’s answer is ‘oversight’, they’ve missed the mark.
- Professional development: help the board increase their knowledge of their industry and therefore their ability to be more forward and strategic thinking. This could include:
- Partnering with management to develop a stronger professional development program for directors.
- Developing a culture around the importance of director self-learning.
- Director evaluations: incorporate evaluations to help directors understand where they could do better and help develop a baseline understanding of what good individual contribution looks like.
- Culture of professional trust: the board should determine both independently and in partnership with the chief executive where the board must stand independently from management. The board should foster a culture of professional trust within itself and with management. The goal is to reach a place where the chief executive can come to the board with the bad news and industry nuances, and in return, receive honest feedback. If the chief executive is the only one indicating to the board what needs to happen next, something needs to change.
- Governance committee: establish a governance committee focused on helping the board perform its best and improve alignment.
- Set time on the agenda to talk about how items in the news, current events, and other things happening within your industry will impact the organization.
How can I add more value through my role?
The practices above can increase the quality of the board’s contribution. There are some practices that also fall within the responsibility of specific roles.
The board chair
Among all board roles, the chair is the most important to ensure the board is value adding. Because of their position, chairs can indicate, lead, and nurture the tone, pace, and quality of the board’s work. It’s up to them to take that opportunity; a chair which doesn’t have a governance and value adding mindset usually contributes to a non-value adding board.
More than once we’ve seen chairs that act only as meeting conveners and Robert’s Rules conductors. This simplistic approach then leads to a board that considers its work to be about meeting attendance versus discussion quality. Boards can maximize their value when a chair understands that their position can be used to guide and strengthen a board, and when they step into leadership (and all the related responsibilities) that brings the board up to a higher quality.
A few examples of how chairs can help their boards maximize their value include:
- Strategist: set time aside in the agenda for the board to articulate and align on the ideal vision for what good performance looks like and hold the board accountable to implementing practices to achieve this state of performance. Being a strategist requires having an educated view on what the current status quo is and what more could be done.
- Coach: coach each director and the board to bring the right lens and mindset to their work. This sometimes requires having the tough conversations when this isn’t happening.
- Partner: act as a partner and confidante to the chief executive to understand how they can work with the board better.
- Learner: value strong governance practices and develop a deep understanding of what that means. A chair should take it upon themself to recognize their knowledge gaps and find professional training, especially as the field of governance, leadership, and chairing is constantly changing.
The chief executive
The chief executive is sometimes in an unfortunate position of just taking whatever board is given to them. They then have a choice of either putting in some work to help the board improve or putting in the work to manage the board into being less of a nuisance.
We’ve seen chief executives partner with boards to help them upskill and be value adding – for example, by offering their time in between meetings to answer questions and provide professional development suggestions to directors. We’ve also seen chief executives keep their board in the dark knowing that the board will mostly agree with whatever the say.
Given the time and resources required, it can be difficult to commit to the work involved in adapting the board into good governors. However, in our view, there is much to gain. At minimum, as boards must legally exist, you may as well try to make them more effective for you. Year over year, as the work is put in, the board will hopefully evolve to becoming more independent and professionalized.
A few examples of how chief executives can help their boards maximize their value include:
- Patience: as a chief executive, know for yourself what a value adding board looks like and working patiently with the chair to achieve this. Have patience for where the board is at while supporting them to determine what the next incremental improvement could be.
- Remain open: have open and honest discussions with the chair in order to gain a board champion regarding the benefits that could be realized; don’t close off even when it seems hopeless.
- Strategic support: we know the day job is already overwhelming, but set aside some time to find the few high impact ways or resources to help the board increase knowledge in the industry (e.g., site visits, deepening orientation, adjusting your reporting etc.).
- Hone the board’s attention: help the board practice being more strategic and focusing on the right things. Your communication gathers their focus so think about how you can lead them to certain levels of thinking (e.g., prime “questions to consider” in the materials to help indicate the types of questions they should be thinking about; be mindful about what details and numbers you provide if you feel the board is “too operational”).
The directors
Directors should aim for the board to be better than the sum of its parts. That can’t happen when each person does the bare minimum or hasn’t been informed, in practical terms, about what showing up professionally looks like. Many directors have been “educated” around what their individual practice should be, but it’s still surprising how many are unprepared for meetings, ask non-strategic questions, or cause disruption in the boardroom. Knowing how to conduct oneself in the meeting is a minimal requirement and it is critical to understand that the work done outside of meetings is just as important as what happens inside.
A few examples of how directors can help their boards maximize their value include:
- Staying informed: do the work to educate yourself on the organization’s sector and context. Seek out professional development to support your knowledge and meeting contributions.
- Develop your strategic lens: developing your ability to think strategically. Partner with another director who is strategic and learn from their example.
- Be curious about your participation: notice when/where you contribute less and question why. Recognize when you may fall into certain patterns of inquiry or discussion topics that may benefit your self-interest but not the purpose of the discussion. Ask for feedback and be open to what you may receive. Take a conscientious look at how your behaviours and contributions add to or detract from the quality of the dynamics, decisions making, and discussion, and adjust them.
- Let go of your ego: be honest about your contributions and examine whether it may be time for you to step down and leave the seat for someone who could be more beneficial for the organization or board.
- Question your perspective: question your understanding of governance and of the organization. Do you know what the organization’s purpose is? Do you know how that should inform your questions and points in conversation? Can you explain succinctly and with fullness what good governance is within the context of the organization? Do you think that a more value adding board would agree with that definition?
Next steps
The work of becoming more value adding and impactful should feel uncomfortable. It requires dedicated time to develop and change perspectives of what governance is and what good looks like. It also involves strategic planning and re-envisioning of how the board shows up and is supported to conduct their role in a meaningful way.
Even so, this kind of approach doesn’t need to be all at once. Practicing curiosity around whether there is or isn’t alignment, how the board is doing, and what needs to change is a good beginning. If the board feels like its resting on its laurels or passively moving through meetings, that’s your sign that there is an opportunity to start a conversation around these ideas.
Contributors
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