Kezia Farnham

Senior Manager

Effective board management: 7 tips for a better board

Only 29% of executives rate their board’s performance as excellent or good. That means the most executives — and likely employees, shareholders and community members — expect more from their board. Effective board management is a path toward not only winning that stakeholder support but also ethically and efficiently achieving key corporate goals.

Directors also have myriad external issues to master; digital transformation, cybersecurity and privacy and the sheer amount of competition in modern business are just a few issues boards face. Without effective board management and the governance that comes with it, directors are just as likely to flounder as they are to flourish. Here, we’ll discuss how to manage a board more effectively, including:

• What an effective board looks like
• The four pillars of an effective board
• 7 steps to manage a board more effectively
• Key board management tips
• Solutions to take your board even farther

What is an effective board?

An effective board can communicate and collaborate internally and externally to set the organization’s strategic direction and take action to get there. They:

• Know they have a responsibility to the organization and its stakeholders and take that responsibility seriously
• Are willing to put personal issues aside to act as a team, steering the organization toward success using empathy and integrity
• Leverage the right tools at the right time so they have the insights they need to make informed decisions

When boards are effective, they lead by example, galvanizing the entire organization to achieve its goals without compromising values like integrity and ethics.

The four pillars of an effective board

What makes an effective board can vary between industries and sectors. For example, a successful nonprofit board may not be as successful in the for-profit sector. That said, most effective boards will address these four pillars:

1. People: Effective boards have directors who represent different ages, ethnicities and demographics and bring a variety of skills and experiences to the boardroom.
2. Information: Boards are more successful with real-time insights about their organization and business landscape.
3. Policies: Directors must set and follow a clear governance model to ensure their actions are ethical, compliant and aligned with the organization’s direction.
4. Culture: Effective board management cultivates a culture of openness, collaboration and safety to challenge the status quo.

The challenges to board effectiveness

Managing the board often falls to the board chairperson. They must unite the perspectives of as many as 30 different directors, a feat not to be taken lightly. However, the challenge of galvanizing directors who are each leaders in their field is just one of the many speedbumps on the path to effective board management.

The biggest challenges to board effectiveness are:

1. Trust: Directors need to trust each other. They must respect each others’ expertise and experience and meaningfully engage with the rest of the board’s point of view to find the best solution for any obstacles the organization faces. Creating that culture of respect isn’t always easy.
2. Information access: Boards don’t always have the information they need to make the best decisions. When they struggle to connect with company leadership and get insight into finances, risk, cybersecurity and more, they have to work with an incomplete picture of the corporation.
3. Lack of training: According to a PwC survey, only half of executives think their board adequately understands emerging technology and cybersecurity, among other issues. Directors who lack that knowledge will struggle to lead their organization into the future.
4. Diversity: Boards thrive on diversity, yet many organizations still struggle to recruit and appoint diverse candidates. Without diversity, however, boards won’t have all the skills and experiences they need to navigate the rapidly evolving business landscape.
5. Transparency: Many boards communicate clearly in the boardroom, but once they leave, their communication channels close. This makes it challenging to stay ahead of issues that may develop faster than board meetings can keep up with.

How to effectively manage a board

Managing a board is a delicate balance of people and leadership skills. It cultivates various personalities and communication styles while highlighting the value of each director’s unique skills.

Effective board management requires:

1. Finding the right chairperson: The Harvard Law School Forum found that successful directors more often report that their chairperson also overperforms, including giving constructive feedback and facilitating productive discussions. Effective board management can’t happen without a highly effective chairperson.
2. Clearly defining roles and responsibilities: Each director should understand what they’re responsible for, and that responsibility should be distinct from other directors. This reduces conflict between directors and increases accountability.
3. Providing thorough onboarding and training: Directors should also have the tools to see out those responsibilities, whether training on emerging technologies or explaining board policies and procedures.
4. Buying into the company strategy: Boards need to not only know the company's governance and strategy but also believe in it. Chairpeople should provide any information directors need to understand the strategy and be willing to put their expertise behind it.
5. Creating committees: Part of effective board management is delegation. Committees help use board time and resources more wisely, ensuring different objectives get met without overburdening every director.
6. Engaging with stakeholders: Directors can’t lead the organization in a bubble. Instead, they should engage with primary stakeholders, determine what matters to them, and be responsive to those needs whenever possible — and clearly explain when those needs can’t be met.
7. Holding regular board evaluations: Chairpeople should take time to evaluate each board member. Evaluations are a critical tool to highlight which areas directors can improve and which areas they can continue to impress.

7 tips for effective board management

As boards strive to be their most effective, they’ll likely encounter practices that work and practices that don’t. Each board will have its secret sauce, but the following practices most commonly lead to effective board management.

1. Take board composition seriously: The directors on your board matter. While boards of generations past were fairly homogenous, modern boards should be as diverse as their customers and employees. Diversity ensures not only that stakeholders can see themselves on the board but also that the board will have a variety of skills and backgrounds to draw from as risks emerge.
2. Think of management as leadership: Effective board management isn’t the same as managing people in other roles. Directors are, after all, leaders in their field. How do you lead leaders? Show them the path forward and give them the tools to walk it rather than closely managing how they fulfill their responsibilities.
3. Engage other perspectives: Boardrooms can create a vacuum that biases decision-making. Effective boards will seek diverse perspectives, including employees, customers, shareholders and community members. The more successfully boards understand and respond to these perspectives, the more effective they will be.
4. Sequence your decisions: Boards have many decisions to make. Set clear expectations with your executives and leadership about when those decisions will be made so they have adequate time to provide the board with the necessary intel. This clarity creates accountability on both sides, which can build trust in the board.
5. Encourage board turnover: Watching board members move on may sound antithetical to effective board management. However, boards should evolve along with the industry, which means making room for directors with different areas of expertise and business backgrounds. History with the organization is valuable, but there must also be a balance with fresh ideas.
6. Create a collaborative culture: Directors should see themselves as collaborators. Chairpeople who can create a culture where helping one director means helping all directors will have a team ready to tackle any challenge, even those that divide director opinions.
7. Inspire continuous learning: Boards should strive to learn about any issue that could impact company performance, whether that’s emerging technology like artificial intelligence or geopolitical crises like the Israel-Palestine War. A culture of learning keeps directors sharp and ensures they have an up-to-date perspective on the organization’s landscape.

Effective boards need effective tools

Effective board management is about uniting a group of directors to do their best work. But it’s also about creating the structures to support them. Board management software enhances collaboration, centralizes information on issues ranging from risk to compliance and creates the accountability and transparency that make great boards great.

But how do you know which software can keep up with your board? Download our software buyer’s guide to learn what features to look for in a technology solution that can improve your board’s performance.