An effective board of directors needs to be greater than the sum of its parts. Without a collaborative approach, a group of highly experienced individuals can fall short of their team potential – to the company’s detriment.
Collaboration sets a strong foundation for better board decision-making, but it can be easier said than done. Directors are frequently time-poor, juggling multiple roles and commitments. They may be spread across dispersed locations and time zones. Communication beyond scheduled meetings can be sporadic, limited and disconnected.
Here are five tips for better board collaboration that incorporate culture, processes and technology to address those challenges and strengthen performance.
- Make collaboration a clear expectation before directors are appointed
Directors are selected for the skills and experience they can contribute to a company’s board. They are typically highly accomplished, accustomed to leadership roles, and adept influencers and negotiators. That doesn’t always guarantee they will be great at working together.
The director recruitment process should evaluate candidates’ fit with the company’s culture and existing directors, while seeking diverse individuals and perspectives. However, many chairs face the challenge of managing the mix of personalities around the boardroom table and nurturing a dynamic that maximises directors’ individual contributions and the board’s ability to meet its collective goals.
It’s important for the chair to set a clear expectation that the board will function collaboratively and develop governance structures and support systems to support this outcome. Part of this involves acknowledgement that collaboration doesn’t necessarily involve agreement. A strong board creates an environment where directors have the trust to share diverging views and engage in robust debate.
- Recognise that communication underpins collaboration
As playwright George Bernard Shaw put it: “The problem with communication… is the illusion that it has been accomplished.” Effective communication between directors should be the bedrock of a collaborative culture, yet too often it only takes place in board meetings. Communication between the board and the CEO is also essential to creating a constructive relationship between the two.
Encouraging greater communication between directors, and between the board and the CEO, must be proactively driven by the CEO and the chair. Some CEOs opt for more informal between-meeting updates for directors, which provide an opportunity to share an insight into the character of the organisation and highlight aspects that might not always be raised in more formal meetings. Chairs should engage regularly with their fellow directors to maintain momentum and share insights and concerns.
- Support the board with collaborative technology
Teams work more effectively when everybody has access to the information they need, when they need it, in a format that works for them.
Providing directors with collaborative technology such as a board portal means they have fast, intuitive access to agendas, board meeting materials, minutes and more. This lets them schedule preparation for meetings around their other commitments and work in a way that is convenient, familiar and aligns with their personal preferences.
A further benefit to using board portals to share meeting materials is increased security, an important consideration as cybersecurity risks become ever more widespread and complex.
Security issues aren’t limited to board reporting packs. Increased communication outside the boardroom brings heightened risks of confidentiality and security. Companies need to consider the appropriate communication channels and provide tools and systems to support their directors. Failing to do so can mean that directors fall back on personal email, messaging apps and SMS to communicate. This can put some of the company’s most sensitive information at risk.
More informal communication can mean people let their guard down. Isolated comments are open to misinterpretation when made without context and sharing them in writing may lack the nuances of face-to-face conversation.
Board management software provides a secure messaging system which encourages directors to communicate openly with one another and the CEO. They can remain confident that their messages will remain confidential and secure from accidental or deliberate interception. The ability to effectively recall and permanently delete messages can also prove useful if comments are made in haste.
Discover how Diligent Messenger enables secure board communications.
- Have clearly structured delegations and action items
Committee structures and delegations of authority enable boards to spend time where it’s most needed by permitting other matters to be addressed in greater detail elsewhere. A strong culture of collaboration is essential for proper committee functioning and to give the board confidence in their oversight and recommendations.
Committees must be empowered to work independently. Their composition needs to enable individual members to contribute where they can add greatest value, provide a mix of complementary skillsets and character traits, and ensure directors have the capacity and commitment to meet the additional workload.
Clear lines of responsibility between the board and its committees, and between individual committees themselves, are essential to avoid duplication. Worse, uncertainty can result in important items falling between the cracks. This has recently been seen in findings from the Banking Royal Commission and other high-profile governance failures.
Minutes of meetings can supplement board and committee charters to add further clarity. Minutes are the central record of discussions, decisions, commitments and requested actions. Contemporary corporate governance software enables the company secretary to use meeting minutes to assign actions to individuals and committees. These can be followed up with automatic reminders to maintain momentum between meetings and avoid items being overlooked.
Diligent Minutes and Actions can increase the efficiency of boards and committees. Learn more about how it can help you.
- Embrace the board evaluation process
Regular self-reflection and evaluation are significant elements of fostering a collaborative culture. They give directors, committees and the board the opportunity to take stock of their performance and identify what is needed to continuously improve and meet the organisation’s evolving challenges.
Annual board evaluations are a baseline expectation for listed companies and, increasingly, other large and complex organisations. Smaller organisations and non-profits may not have the time or resources to conduct a full external evaluation each year, but there is a range of options to help them easily conduct an in-house assessment. Board surveys can be conducted anonymously online, and should consider the dynamics between directors, the performance of committees, areas where training may be valuable, and how the board’s functioning and the effectiveness of its meetings can be improved.
However, company secretaries and management teams shouldn’t wait for the board evaluation to be a catalyst for change. A collaborative, energised and engaged board is best placed to deliver the leadership and guidance the organisation needs, which is in everybody’s interests. New processes, tools and technology can all contribute to stronger communication and a more collaborative culture.
Find out how Diligent Board Evaluations helps boards perform better. It’s just one component of the Diligent Governance Cloud, a unique enterprise governance platform that offers solutions to a wide range of corporate governance needs.
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