Why board member engagement matters
Engaged board members make a board perform better. Research shows this, and the experience of many boards comes to the same conclusion.
In New Zealand, a recent study of seven companies shows where the board is engaged, eager to learn new things and to work together sharing different points of view, performance is better. Whereas, companies with less-engaged board members show “competency gaps,” and “poor communication.”
In Australia, a report by the Australian Institute of Company Directors emphasises the importance of engagement: “The days of just reading board papers and turning up to board meetings are long gone. To be an effective director, you need to build a strong base of knowledge about the organisation’s operations, markets, customers and its people.”
“Research suggests that leader behaviour, the consistency between organisational policy and leader actions, along with leader role modelling, determines the degree to which the organisation’s culture emphasises ethics and positive behaviour,” writes Australian Human Resources Institute expert Melinda Muth.
What is an engaged board of directors?
Engagement is not easy to define, but here is a good approach:
“I have come to define board engagement the same way I define employee engagement. Engagement is about the level of intellectual, physical and emotional commitment a board consistently demonstrates to the organization and its mission. Engagement takes many shapes and sizes, from a financial contribution to a meaningful presence at board meetings and from community ambassadorship to stakeholder door-opening and relationship-building, comments leadership coach Patrick Jinks.
Beyond the traditional financial, policy, compliance and mission-driven roles, a fully engaged board is also actively and productively invested in the work of the organization. Boosting board engagement is not an exact science and may involve some trial and error, but the chair and the company secretary can take action to affect how board members feel about the company and how they interact with each other and with the management team, according to professional services firm RKL.
Importance of Onboarding
How can board members be motivated to reach this level of engagement?
New board directors need to understand all about the business itself and the market it operates in. But it is just as important that they inculcate the organisation’s purpose and culture. Achieving that can make a great difference in the success of the orientation and onboarding, in ensuring that new directors get on the same page with the entire board and its mission.
But bringing on a terrific board member is only the first step. Taking time to ensure that each board member becomes personally invested and engaged in the mission of the organisation is time well spent. When truly engaged, board members will become advocates for the company in public, and strategists for it in the boardroom.
A board member who engages at this level will also make the effort to fit in well with other board members and create a productive relationship with them.
An engaged board is a forward-thinking board that strives to have a collaborative partnership with the CEO. Engaged boards work between board meetings, and attend meetings well prepared. They are willing to deliberate candidly, confidently treading on sensitive topics that may result in challenging discussions because they trust one another and are comfortable with the mission and culture of the company.
The company’s mission is a vital part of the board’s work and decision-making. It is essential that all board members engage with the organisation’s mission, or they will never be properly engaged in the purpose of the organisation and what makes a successful strategy for it. It’s well known that purpose-led boards perform better, and this is why the corporate mission should be a tangible and visible part of the organisation’s culture. The mission is at the center of all decisions that the board makes so the board should continually review all activities to ensure that they’re oriented in that regard.
Continuous engagement with strategy planning
The mission should also be the guiding light in terms of the organisation’s plan for strategy plan. The plan should be a living document whereby the board continuously monitors progress toward the company’s goals and objectives. The strategic plan should be flexible so that the board can take advantage of successes and adjust and adapt as unexpected issues crop up.
It’s a good practice for boards to dedicate a significant part of their board meeting to strategy planning, along with monitoring its progress, as much as possible. The plan should be updated periodically, especially if significant events have taken place, such as major staffing changes, cyber risk activity or negative media attention.
At least annually, the board should take stock of their accomplishments and connect them to the decisions they made that shaped progress. An engaged board will take part in regular discussions outside of meetings about strategy as well.
Ensuring communication via board management software
Communication plays a major role in how connected and engaged board members are. Communication is made easier for board directors when it’s convenient.
A board portal offering Modern Governance tools like instant real-time communication with the highest grade of security enable regular communication among board members, wherever they may be, at any time.
Diligent Governance Cloud supports board member engagement
There is, indeed, nothing worse than poor communication and weak support to erode board member engagement.
Diligent Governance Cloud provides modern governance solutions that allow board members to engage with all issues online in real time. Modern governance means having the ability to communicate using a secure platform. It means having the flexibility to use any electronic device and to be able to connect with other board members any day of the year and at any time of day or night, regardless of geographical location.
But Diligent Boards is much more: the base program for agendas and board meeting planning. The platform offers state-of-the-art security so there’s no worry over cybercriminal activity. Diligent Boards integrates fully with all the software solutions that comprise Governance Cloud, a complete ecosystem of digital governance solutions. With fully integrated software solutions for meeting minutes, secure messaging tools, board self-assessments, voting, nominations, virtual data rooms and entity management, board directors can manage issues like conflict of interests using one, highly secure platform.
Diligent knows how important convenience is to board directors, so the software designers developed applications where board directors can access all the tools using their tablets and cell phones, in addition to their laptops. Diligent also offers top-notch customer service 24/7.
March 1, 2021
7 key differences between board of directors and executive committee
The executive committee is a sub-set – or sub-committee – of the board of directors. Boards cannot always gather quickly to respond to urgent matters; the executive committee’s function is to fill that gap. It functions as a steering committee and reports back to the full board on its activities…
October 30, 2020
Top 5 Mistakes to Avoid When Transitioning to Virtual Board Governance
With rapid change affecting businesses (including growing emphasis on environmental, social and governance (ESG) principles and the COVID-19 pandemic), it seems organisations are called on to be more: more informed, more collaborative and more responsive to stakeholders. The systems and processes that businesses need now are encapsulated in the concept of modern…
April 7, 2020
Best Practices for Conducting Remote Board Meetings
Remote meeting software revolutionised and modernised standard board meeting procedures. It was originally developed as a governance tool for businesses and organisations so they could arrange and discuss agenda items without incurring the time and expense of having to put a board meeting together at a physical location. Over time,…