The business environment and stakeholder preferences change in subtle and dramatic ways. In a dynamic board environment, effective governance is essential to the long-term success of a company. There is no one solution that is universally applicable however, the most effective boards utilize proven strategies to assess, drive and improve the effectiveness of their board.
These best practices include a clearly-defined evaluation process, a well-defined board development culture and the use of digital tools to improve efficiency and transparency. These tools and methods help assess the effectiveness of the board’s role as trustee, fiduciary and representative for the company. They also promote collaboration among all directors.
Conducting an assessment requires board members to put in their time and provide candid feedback. Boards must define their goals and discuss them prior to the start of the process. Boards can make use of a portal for directors to easily communicate information and ideas and monitor progress towards objectives.
Another aspect to be considered is the structure and composition of a board. This includes the size and composition of the board, as well as the number of committees established and the manner in which and how often they meet. Be sure that the committees are designed to handle their workload and that the primary focus of each remains on the longer-term value drivers for the company.
The chair’s ability to facilitate productive discussions with the board and decision-making processes is also crucial. This includes the chair’s communication and relationship-building skills with the board, other directors, and management. In addition the chair must be open to constructive feedback on his or her leadership style.
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