Engaged boards are vital to the success of every business and organization. Whether they’re small or large, new or old, profitable or static, engaged boards create value. Board engagement best practices for modern governance place a heavy emphasis on diversity in the boardroom. It’s not enough just to get warm bodies from diverse backgrounds and perspectives into the chairs. Diversity on boards is a major asset only if all members engage in discussions and voice their concerns and fellow board directors allow them to express their perspectives and opinions. It’s only when those diverse perspectives join together that the board will produce value creation.
Many components go into board engagement. It starts with finding the right people and getting them invested and involved right from the start. By focusing on the mission, working on the strategic plan and keeping clear, open communication, new board members can put their best foot forward and keep moving ahead.
Orientation and Onboarding Get New Board Directors Up and Running
New board directors usually do their homework and learn as much about the organization that they’re being appointed to lead. The next steps of orientation and onboarding can make a big difference in how quickly new directors will begin to participate in discussions and help to make a difference. Leaders of the orientation and onboarding sessions can help to improve their processes by getting feedback from new directors. Communication is a two-way street.
There’s no better time to ask for board directors’ perspectives on the board and the organization than when they are still outsiders, at the time of their appointment, before they get started as leaders.
The orientation and onboarding processes set the tone for the relationship between board directors and the board. These processes are vitally important precursors to board engagement because they clarify and define each board director’s roles, duties and responsibilities. Board directors will know their expectations from the first day, including any expectations for committee involvement.
Quality orientation and onboarding sessions will give new board directors a pulse on board activities. In order to be properly engaged, they need to know when the board meets, what materials they can expect to get before meetings and where they can expect those materials to come from. By immersing new board directors in company materials and information right from the start, they’ll gain a sense of how people within the company communicate and whom to go to for clarification and answers.
Board Engagement Best Practices
Making the Mission a Part of Every Decision
The company’s mission is a vital part of the board’s work and decision-making. It’s so important that some boards make it a practice of reading the mission at the beginning of the board meeting. The company mission should be a visible part of the corporate culture. The mission is at the center of all decisions that the board makes so the board should continually review all activities to ensure that they’re adhering to the mission in word and in deed.
Continuous Engagement With the Strategic Plan
If it was crafted well, the mission played a central role when the board developed its annual strategic plan. The strategic plan should be a living document whereby the board continuously monitors progress toward the company’s goals and objectives. The strategic plan should be flexible so that the board can build off progress and adjust and adapt as unexpected issues crop up.
It’s a good practice for boards to dedicate a significant part of their board meeting to strategic planning and monitoring at least twice a year. The strategic plan should be updated periodically, especially if significant events have taken place, such as major staffing changes, cyber risk activity or negative media attention.
At least annually, the board should take stock of their accomplishments and connect them to the decisions they made that shaped progress.
Communication Is King
Communication plays a major role in how connected and engaged board members are.
Part of the CEO’s job is to be the face of the company. One way to motivate and inspire board directors is to ask the CEO to make an occasional presentation to the board about non-financial successes. It’s good for the board to hear stories about employee achievements, company initiatives and other great things to which they wouldn’t ordinarily be privy.
Communication is made easier for board directors when it’s convenient. Board directors will have much to communicate about when they receive their board meeting materials in plenty of time before meetings. On both accounts, Diligent Corporation provides modern governance solutions that allow board members to get their board materials online in real time. Modern governance means having the ability to communicate using a secure platform. It means having the flexibility to use any electronic device and to be able to connect with other board members any day of the year and at any time of day or night, regardless of geographical location.
Provide opportunities for board directors to strengthen their personal and professional bonds. Annual board retreats provide good opportunities to focus on board work and allow board directors to connect in a relaxed, comfortable setting without distractions.
Between meeting times are also good opportunities for board members to cultivate relationships as they work on issues and bring insight back to the board. Impromptu breakfast meetings, emails, telephone calls and other types of communication are good ways to highlight and share industry news, discuss solutions to business challenges and plan for organizational success. All these interactions will help board directors to better understand their roles around governance.
Board Composition Is a Continual Work in Progress
Part of the role of nominating and governance committees is to continually be on the lookout for candidates to round out a diverse, well-qualified board of directors. This group reviews the needs of the board continuously as they review the skills of potential board member recruits. When done well, this process relies on board engagement best practices and assesses each candidate for fit within the current board composition, whether they can run meetings as necessary, and whether they are primed and ready to become leaders of the company.
Board engagement best practices take into account many different facets of the business. Overall, a modern board is an engaged and impactful board that’s eager to go above and beyond the status quo to move the company forward.