How do you enhance your board’s effectiveness?

Board effectiveness is crucial to good corporate governance and can significantly impact a company’s success. However, many boards struggle to maximise their potential, often due to outdated practices or lack of diversity in thought. 

If you think your board is in this position, consider these tips to reset your collective way of thinking and develop a blueprint for stronger governance.

A competency map is a framework that outlines the essential skills, knowledge, and attributes required for effective governance in a boardroom setting. 

It helps organisations determine the best candidates to serve on their boards, and it can also be used to assess existing members and identify areas for improvement. 

Here’s a step-by-step guide for developing a competency map:

Improving board effectiveness starts with identifying gaps in the board’s performance and planning for succession. This evaluation can also help you identify individual directors needing additional support or training.

Succession planning is another critical component of improving board effectiveness. By planning for succession, you can ensure that the board has the right mix of skills and experience to meet the company’s strategic goals. It also helps ensure the board is prepared for unexpected changes in leadership or governance issues.

The next step is to define the competencies required for your board to be successful. In other words, what knowledge, skills and behaviours do you need?

These competencies should be aligned with the company’s purpose and business strategy.

Now, you can begin identifying potential board members and evaluate their skills and experience. 

Conduct interviews and reference checks, and assess the individual’s education, professional experience, insight, judgment, expertise in relevant fields, and leadership abilities.

If you’re asking, “how do you enhance your board’s effectiveness?”, one of the first things you’ll hear in reply is “trust”.

Trust is everything. Directors who trust each other will likely be far more effective at their jobs. You can help create an environment where trust and respect thrive by:

1. Acknowledging that every voice matters by setting ground rules for discussions (e.g., no interruptions when someone is talking).
2. Promoting active listening by encouraging members to ask clarifying questions before responding with their opinions.
3. Hold brainstorming sessions where board members feel free to suggest ideas they’re unsure about. When people are encouraged to share thoughts that are not rock-solid, they are more likely to trust their peers and respect their ideas.

Groupthink is a phenomenon wherein group members want a consensus so much that they forget the importance of individual or collective critical thinking. 

To prevent this from happening, it’s important to encourage dissenting opinions in board meetings and create an environment where diverse views are welcomed and respected.

Some strategies for combating groupthink include:

• Encouraging members to speak up by providing an agenda before the meeting so that everyone has time to formulate their thoughts before the discussion.
• Promoting critical thinking by asking questions like “What assumptions are we making here?” or “Are there any other perspectives we should consider?”
• Ensuring that decisions are made on the basis of facts, not feelings or political considerations.

Meetings, the cornerstone of board effectiveness, can quickly become time-consuming, unfocused and ineffective due to bad practice. 

Optimising meeting efficiency is critical to enhancing board effectiveness, facilitating meaningful discussions and driving decision-making.

These tips could save you trouble in the long run, streamlining your meetings and ensuring they deliver the best. 

• Distributed meeting agendas.
• Clear expectations for board member participation.
• Technology-enabled meeting management tools such as automatically-generated meeting notes.

With the increasing responsibilities assigned to boards, monitoring their performance has become more critical than ever before. Good monitoring means accurate, regular review. These will identify areas where the board excels and where it may require further development. Regular performance evaluations can also help boards stay current with the latest trends and best practices in their industry. 

For example, good boards should annually review their:

• meeting protocols
• performance metrics of individual members (what were they hired for and have they met these expectations?)
• progress towards strategic objectives to ensure they function effectively.

In today’s corporate climate, it’s more important than ever to understand the dynamic role of a board member. 

The “show up, vote, then go home” days are over. Now, being a director requires attention, experience and the right training. 

Is there specialised training available to directors? Absolutely. The Corporate Governance Institute’s Diploma of Corporate Governance offers a comprehensive program designed by experienced directors and governance professionals to equip individuals with the skills needed to be effective board members. 

Take a course, and you’ll focus on understanding board operations, legal liabilities, and responsibilities – in short, all the necessary knowledge that makes a great director. 

Take the first step to becoming a successful board member and enrol in the Diploma of Corporate Governance.