It stands to reason that the more time you invest in something, the more impact you will have on it. That’s precisely the reason that engaged boards create more value for their companies. Research from McKinsey confirms that theory with a study that showed board directors of high-impact boards spent an average of 40 days per year working on board duties. By contrast, directors of low-impact boards spent only 19 days per year on board service. We can loosely define engaged board directors as those who want to contribute more than the bare minimum.
It’s a huge source of frustration for board director peers and executives when even one or two board directors aren’t actively engaged and fail to follow through on tasks that they were assigned. Clearly, board engagement matters to the company and to others working in or with the company.
By following best practices for strengthening board engagement, new board directors will start their first day of board service knowing fully what is expected of them and will continue to increase their engagement throughout the rest of their term.
Best Practices for Strengthening Board Engagement
Board engagement is important to the success of every business. Engaged boards help to build an environment of trust, collaboration and transparency, and those qualities are highly important to shareholders and stakeholders.
To develop a more engaged board, organizations should consider the following best practices for strengthening board engagement:
- Keep the board focused on the mission.
- Work to compose a diverse board.
- Conduct a strong board orientation shortly after board members are appointed.
- Follow the orientation with a more intensive onboarding program.
- Find ways to connect the strategic plan with board engagement.
- Ask the CEO to give non-financial presentations occasionally.
- Ensure that board directors get board meeting materials early enough to review them.
- Work on improving communication.
Stay Focused on the Mission
The organization’s mission is a vital part of the board’s work. It is central to decision-making. Many boards maintain a focus on the mission by reading the mission statement out loud at board meetings. Boards should keep their organization’s mission statement visible, and add it to the company literature, meeting minutes and other company documents.
Work to Compose a Diverse Board
Diversity on your board is important because it brings multiple perspectives into the boardroom for boards to consider as they pursue debates and discussions. Diversity helps to engage boards when women and other minorities can express their opinions and be assured that they’ll be welcomed and accepted by others. Diverse perspectives give new board directors plenty of opportunities to engage in board discussions.
Develop Quality Orientation and Onboarding Programs
A solid orientation process helps new board members learn more about the organization and what the rest of the board expects of them during their terms. A quality onboarding program sets the stage for new board directors to engage in discussions soon after being appointed. Onboarding programs will help board directors get acclimated to their positions and clarify their duties and responsibilities, including expectations for service on committees.
Engage Boards by Staying Connected to the Strategic Plan
The mission plays a primary role in the strategic plan. Board engagement should revolve around the strategic plan. The strategic plan should be a living document whereby the board should be monitoring its progress toward the organization’s goals and objectives.
Engaged boards should be dedicating a large part of their board meetings to their strategic plan at least twice annually. The strategic plan should be flexible so that the board can build off its progress and adjust it as things change. Boards should be especially mindful of revisiting the strategic plan during times of crisis. At least once a year, boards should take the time to connect their decisions to their accomplishments.
Another way to engage board directors is to give each of them a specific area to be responsible for, such as cybersecurity, risk or industry. That director would be the eyes and ears of the company on that issue. Boards should encourage their directors to make site visits to various facilities to get acquainted with operations. Such visits should be approached with a spirit of collaboration and not be intrusive.
Engaging with the CEO
To encourage engagement, boards should periodically ask the CEO to give a talk or presentation on non-financial issues such as operations, employees, employee achievements, company initiatives or employee development for leadership positions. Talks by the CEO may inspire board directors to ask questions and increase their engagement level.
Make Board Meeting Materials Available Early
Your board directors will be the most productive in board meetings when they’re able to get their board meeting materials early enough to read through them and ask a few preliminary questions before the board meeting starts. By implementing Diligent Boards, your board directors will be able to access board materials as soon as they’re available because the board agenda and all associated documents can be published online in real time. Directors can access their materials any time of day or night and from any location. Board portal materials are also available using any mobile device so board engagement can occur early and often.
Good Communication Enhances Increased Board Engagement
Board directors can only engage fully with the board when they have the full confidence of knowing that their communications are secure. Diligent Boards offers a fully integrated platform of digital board meeting management software solutions that allows boards to pursue their board director duties using a digital platform with top-of-the-line built-in security. By having the assurance that board communications and collaborations are completely confidential, board directors are more likely to engage and focus on board issues without unnecessary distractions.
Overall, best practices for board engagement involves many different aspects of the business. Modern boards are engaged and impactful. Their individual directors eagerly go above and beyond what is normally expected to help their organization to not only survive but thrive in today’s fast-paced business arena. Modern governance addresses the core issues of speed, visibility and security. Best practices for strengthening board engagement combined with governance tools by Diligent Corporation provide all the necessary tools that today’s engaged boards need.