To avoid these pitfalls, it's essential to address various aspects, from the skills mix to the culture and processes in place. In this article, we'll explore five key strategies to elevate your board's effectiveness.
1. Get the people and skills mix right
The foundation of a high-performing board is people who are adaptable, resilient, strategic and collaborative. Increasingly, this means focusing on diversity. Research by the UK’s Financial Reporting Council shows that diversity directly improves the performance of boards and the businesses they lead. The benefits include better financial performance, improved boardroom collaboration and a better chance of reaching consensus on important decisions.
As a first step, review the makeup of your board to check that it consists of a diverse and expert range of voices. A homogenous board can lead to groupthink and limited perspectives. Recruiting individuals with diverse backgrounds and experiences can provide fresh insights, enhance decision-making and improve problem solving ability
Equally, it's important to have a well-balanced mix of skills, including financial expertise, legal knowledge, industry-specific insights and leadership experience. Today, the mix should also include digital and security specialists: people who can assess the opportunities and risks of new technologies that are transforming business.
Action: Regularly assess the board's skills and competencies to identify areas for improvement and recruit new members as you need to.
2. Get the culture right to drive best practice
Culture is the bedrock of any board's success. And a positive culture starts with proper preparation for meetings. This involves setting clear agendas and providing materials well in advance. For their part board members should be willing to thoroughly review all materials and agenda points to enhance discussion and decision making. They should also be willing to listen, be open to change, and be prepared to challenge established thinking.
To drive this mindset, establish a clear charter of expectations against which the performance of each board member can be benchmarked. That charter should be reviewed and renewed as the organisation and its challenges evolve.
Onboarding and educating both new and existing board members is equally crucial. New members should understand the organisation's mission, history, and challenges. Everyone should also be aware of their roles, responsibilities and the culture that defines how they are expected to work.
Action: Invest in orientation and ongoing education to make sure everyone understands your culture and values.
3. Use the right information to manage risk and improve problem solving
Data is the lifeblood of business transformation – helping managers at all levels in organisations to find new ways to target customers, streamline processes and reduce costs. Increasingly, data-driven insight is also key to boards that want to better understand the challenges and risks they need to manage.
EY’s Global Board Risk Survey shows that organisations that manage risk well are significantly more likely to use data and technology effectively. But the picture is not the same for everyone. EY’s research also found that fewer than 20% of boards say their organisation is effective at “leveraging data and technology”, or “delivering timely, insight-driven reporting to the board.”
Boards that want to improve performance must address this issue – firstly, by making sure that access to the right data is a key part of the board agenda, and secondly, by encouraging investment in the systems and processes that will deliver the insights they need to identify and solve problems.
However, it's not just the responsibility of the organisation to provide information. Board members should also take the initiative to do their research and seek external sources for relevant data and information. This proactive approach to information gathering enhances the quality of discussions and decision-making during board meetings.
Action: Push the business and board to make availability of the right data a priority.
4. Streamline and secure board work processes
Given the time constraints that many board members have, efficiency is key to a high-performing board. Streamlining board work processes can save time, resources and ensure that each role within the board can work as productively as possible. The most effective way to do this is by using a good digital board portal. These platforms provide easy centralised access to current and archived documents, streamline communications, accelerate decision making and improve collaboration among board members.
They also enhance security and compliance, keeping board communication secure within the portal and restricting access to confidential documents
It’s important to remember, however, that board portals offer different levels of functionality and performance. To make sure your board portal is performing as efficiently and productively as possible, review what your current board portal offers against competitive offerings in the market.
The most important things to consider are:
- Range of features and functionality
- Availability of apps and offline working for anywhere/anytime access
- Strength of security measures and credentials
- Support SLAs
- Provider credentials and customer history
- Future product roadmap and regularity of updates
By adopting an advanced digital portal, you can reduce the administrative burden on your board, allowing members to focus more on strategic discussions and decision-making.
Action: Review your board portal’s capabilities with our board portal buyer’s guide.
5. Complete a regular board evaluation
The most important practice that helps organisations to continually improve board performance is an annual board evaluation – a self-assessment process that helps organisations to gauge the efficiency, capabilities and potential of their board.
Board evaluations promote a culture of feedback, transparency, and accountability. They also allow board members to reflect on their individual and collective contributions and identify areas for improvement.
Think of an evaluation as a high level and strategic gap analysis, and one which you can easily complete using a digital tool like Admincontrol Board Evaluation. Board evaluations provide valuable insights on the ability of the board to solve problems effectively, meet competency requirements, deliver high-quality strategies, set targets, provide effective leadership and report efficiently and compliantly.
Use these insights to build awareness of best practices, understand the board and management’s expectations and plan concrete measures to improve performance of the board. The evaluation process is crucial for creating a culture of feedback that helps boards and their chairs to deliver best practice governance. Nomination committees can also use the outputs of evaluations to identify whether they need to recruit new board members to fill competency gaps.
On multiple levels, evaluations lead to actionable insights that guide board development and boost overall performance.
Action: Read our ultimate guide to board evaluation
Conclusion
Improving board performance is a multifaceted endeavour. It requires a complete approach that involves getting the right people with the right skills, fostering a positive board culture, ensuring access to the right information, streamlining processes, and conducting regular evaluations. By addressing these key areas, your board can drive best practices, accelerate decision making and solve problems more effectively.
