Ten Simple Strategies That Make Boards Better
By Les Wallace, PhD
1. Use a “balanced measures” approach to measure organizational performance
Organizations in the last decade have adopted a “balanced measures” approach to judging performance. Business results have always been prominent, but now progressive organizations also measure customer/client value and employee engagement.
Balance is a relative term. Business results, customer/client value and employee engagement are linked to one another so closely in the business literature that keeping a close eye in each of the three categories provides boards a full spectrum view of enterprise performance. While business results (financials, grants, philanthropy) might be reviewed each Board meeting, customer value data should be viewed twice a year and employee engagement data at least once a year.
2. Create a simple set of dashboard indicators to review at each meeting.
Balanced measures requires a reporting system that can be grasped easily and reported with monthly / quarterly frequency. The “dashboard” metaphor suggests how Boards should require performance information to be presented: a simple set of indicators provides a quick “eye” on overall performance and allows Boards to determine when and where they wish more detailed reports. How many “dials” should the Board review? Somewhere in the neighborhood of 3-5 for each balanced measure. Just the process of identifying and developing the dashboard is a great Board development exercise.
3. Tie at least 50 percent of each agenda to the objectives from your strategic plan.
Most Board meetings are a fast paced run through of old / new business and the traditional boring report-outs from administrators. With a balanced measures approach you can simplify the time required for report-outs; with a consent agenda approach you can accept numerous self evident update reports without wasting valuable Board time. That leaves about half an agenda for one of the most important functions of governance: strategic thinking and planning. In today’s fast changing business environment, Boards struggle to assure enough strategic change to remain relevant and successful. Investing half of each meeting to strategy discussions enhances focus, performance and responsiveness to strategic issues.
4. Conduct board development at each board meeting.
Board development is a constant challenge for most organizations. Limited budgets and free time make travel and conference participation for education a rare opportunity. One solution is to do a wee bit of development at each Board meeting. Reading and discussing an article on governance, scheduling product or service tutorials at each meeting, having a local person who is “seasoned” at governance provide a short tutorial on a chosen topic, asking your accountant to deliver a financial lesson (e.g. how to read a balance sheet), having a customer / client visit and provide their explanation of your product/service value are all brief time investments that will contribute to growth of governance capabilities.
5. Have a brief “product” or “service” tutorial at each board meeting.
A ten minute brief update on one your organization’s products or services can provide a means for Board members to stay current and maintain a “feel” for the texture of their enterprise. This enhanced literacy is also accompanied by a chance to interact briefly with managers and program leaders as a means of evaluating the CEO’s management and leadership influence. These briefings (15 minutes should be sufficient) also qualify as board development investments.
6. Create “rules of engagement” for interaction and support with one another.
A seasoned Board is adept at decision making, interpersonal relationships and dealing with difference of opinion and conflict. Unfortunately, most of us don’t serve with a full contingent of experienced governance members. Most groups, intending to behave more like teams, find it helpful to develop a set of rules of engagement that outlines commitments expected from each board member.
7. Have a job description and commitment to serve signed by each member.
Joining a Board is frequently fraught with uncertainty about the amount of time commitment required, conflict of interest guidelines, board development commitments, travel, representation and other Board duties. Just like a job description helps focus an employee’s work, a Board job description not only helps focus the reality of the commitment but also scares away those who might consider joining the Board for the wrong reasons. Making the job description and conflict of interest statement a “commitment” that each new Board member signs helps raise the awareness of the governance commitments expected.
8. Conduct a board self assessment at least once a year.
Progressive Boards engage in regular self assessment. These can be as limited or far ranging as the Board feels is helpful and for which there is support capacity. Not wanting to conduct a large scale more cumbersome assessment is no excuse for not doing something each year. We know many Boards that evaluate the quality of meetings, agenda management, or perceptions of individual participation as more focused assessments annually. While a comprehensive assessment would cover all aspects of governance, Boards may be well advised to conduct one of these every several years while selecting some smaller portions for focus on an annual basis.
9. Provide formal feedback to your CEO twice a year.
While CEO evaluation and goal setting is an annual function required in effective governance, many Boards fail to do this on a timely basis. Even when conducted effectively it is not enough: a formal mid year review should also occur that provides the CEO direct, formal feedback on how the Board sees performance. This bi-annual discussion keeps expectations and performance calibrated, assures CEOs have timely recognition of Board perceptions and will result in better overall organizational and Board performance. For the Board and CEO who may not be fully in sync, quarterly discussions may be called for. While the once a year evaluation and goal setting will be time consuming, the mid-year feedback process will customarily require less time investment, assuming performance is on track. Customarily the executive committee leads the evaluation and review process, however, all Board members should be involved in the process.
10. Retreat at least once a year to revisit and reflect on organizational values and strategic plans.
The progressive Board finds time to “retreat” at least once a year, if only for a day, away from the pressures of a typical agenda. Discussion at these retreats allows relaxed exploration of changing business conditions, shifting customer expectations, chronic challenges, expansion, and a renewal of focus on strategy for the governance body. An annual strategic planning retreat is almost commonplace with many Boards. Certainly, some effort to refresh the strategic plan at least every three years is a minimum. In our experience the average retreat is somewhere around 1.5 days, it is not unheard of to only invest a day or to expand to 2.5-3 days for the Boards facing more complex challenges. Whatever your investment, make it something. Creating a calendar that selects the time a year in advance gives most Board members time to clear their calendar and make the commitment.
Les Wallace, Ph.D. is President, of Signature Resources Inc., an international consulting firm headquartered in Colorado. Dr. Wallace works with about 20 boards a year.
For reprints contact: les@signatureresources.com
