The Role of the Board of Directors

Q. What’s the biggest complaint CEO’s have about their Boards?

A. The Board is a waste of time – it doesn’t add any value.

Q. What’s the biggest complaint Board members have about their Boards?

A. This Board feels like a waste of time – it doesn’t feel like we’re adding any value.

Q. What’s going on here?

A. Who said the role of the Board is to add value? It’s not.  At least not in the context of masterminding the next I-Pod or the next break-through marketing program.  That’s up to the management team.

The role of the Board is to govern - some Boards are even called Boards of ‘Governors’.   There are 5 key elements of governing effectively:

 

1. ensuring that the organization has the right CEO
2. ensuring that the organization has a strategic planning process
3. learning the business and the industry well enough to have a well-formed perspective on benefits and risk of the organization’s strategic direction
4. monitoring to ensure that strategies are being executed as planned
5. monitoring to ensure that the Board is governing effectively.

The Board role is a mix of three things: out-front leadership (CEO and planning process); knowledge and insight (business of the organization); monitoring and compliance (execution and results).

Managing this mix is the responsibility of the Board chair. There isn’t a more important role in the organization. Staffing the Chair role requires careful planning and insight.

There are 6 key qualities of a good Board chair:

1. time to do the job – there are more time demands on the Chair than on anyone but the CEO
2. solid team builder – getting the Board on the same wavelength and creating a good working relationship with management
3. good delegator – there’s a lot to do; the only way to get it all done is through other people
4. comfortable with process – the mechanics from running meetings to information disbursement are almost as important as what the Board talks about
5. strategic – able to lead and keep the Board focused on the high leverage issues, not minutiae
6. firm – knowing how to take and keep control when members, stakeholders disrupt effective workings of the Board

Directors that understand their role clearly get more satisfaction from their involvement with a Board. Management teams that understand the Board’s role clearly set better expectations about what to expect from their Boards. 

Making it happen is simple: make the Board’s role a key topic for the strategic planning and Board monitoring process.

 

RETURN TO BOARD ROLE AND BOARD EFFECTIVENESS