The function of a board of directors is to assess the business strategy and direction whilst meeting shareholder and stakeholder interests to ensure prosperity. Its role includes dealing with business and financial issues relating to corporate governance, social responsibility and ethics.
However, board members are human beings and managing the relationship between CEO and board directors can be challenging. A dysfunctional partnership affects the organisation’s overall performance so how do you build a strong relationship with your board?
The following tips should be considered to encourage the board’s relationship-building process.
1. Educate and inform
As the board’s primary responsibility is that of trustee on behalf of the firm’s stakeholders in relation to the organisation’s vision, mission, values and strategy, day-to-day business operations are left to management. Therefore, the directors’ grasp of the business gravitates towards general rather than comprehensive.
For senior management decisions made in difficult situations, the board will require enough information to be able to understand and make an assessment on whether the decisions fit into the corporate strategy. This will depend upon the flow of information provided to them. Boards need to be clear about the type of information they expect from the CEO and management. Keeping the directors well-informed and educated will avoid any surprises – consistent communication of timely and relevant information is key.
2. A clear understanding of roles
Directors and CEOs should have a clear understanding of not only their own role but of each other’s. A well-functioning partnership between board and management will be reflected by the clarity in roles and expectations. The important functions, responsibilities and legal frameworks within which the board and its directors operate should be outlined clearly from the outset.
The board itself is not constant – it changes, and so board members need to review its role and the look at a fresh perspective on its approach to governance, particularly when a new CEO joins. However, this will also apply to executive leadership as this process is associated with board governance. In other words, both sides of the leadership scale – the executive and the board - require a revisit and a need to refresh the understanding of the roles.
3. Create context and clarify expectations
Board meetings are where specific items are set for discussion as well as the more general. The agenda can comprise priorities mentioned by board members and condensed into a shortlist. The usual meeting context can fall into the following three areas:
- Success stories to celebrate – achievement recognition
- A problem for which advice is required on how to resolve it
- Background information to help guide future discussions and decisions
Expectations would constitute the actions required to achieve the items listed on the leadership agenda. This would involve conversation and further discussion, clarifying the roles and responsibilities pertaining to undertake the tasks at hand and what is expected - a mutual understanding of how priorities are to be tackled.
4. Ask for feedback and establish plan for performance evaluation
Sharing good news at board meetings is just one area of discussion. The board also has the opportunity to ask for feedback in terms of concerns, problems and mistakes not just on open issues, thereby creating a real sense of value.
Creating a performance-monitoring plan to include a timetable leading up to an annual an evaluation would incorporate the board’s ability to measure its own effectiveness.
5. Add value outside meetings
Valuable discussions and interactions take place at board meetings. However, one-to-one talks can also be beneficial, where you can gain knowledge and value.
Each member is an expert in their own field, e.g. HR or technology, and can therefore provide valuable advice. Consequently, it’s not just the board but individual members who are resources.
Although governance is valuable and essential, one-to-one and two-to-one discussions outside meetings provide perspective, context and wisdom.
Boards are comprised of human beings – each with their own agendas, backgrounds and views. While successful directors tend to share some common attributes, it can be a challenge to get them thinking and working together for the good of the organisation.
Even the best boards can go off-course, as the challenges pointed out in the article show. The key is in steering them back on track.
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