How do I contribute?
When starting out as a director, it’s natural to be unsure about how you will add value in the boardroom. Until you get to know the business you can’t be expected to know everything about the business. Before accepting a board position, you should always do some due diligence around the organisation and know what you’re getting yourself into.
There are also some important questions that any enquiring board member will ask of management – or each other – about the items of business placed in front of them. These are questions that you should ask, not questions you can afford to hope someone else will ask!
- What issues do the papers in front of me raise?
- They may be explicit matter or implicit in the papers.
- Do we have enough information?
- Did we get answers to what we asked last time?
- Are we dealing with issues of risk, compliance and strategy in the right balance? Is the bad news reaching the board?
- How can we measure/benchmark progress?
- How do we validate information that doesn’t seem right?
A board needs to constantly be asking itself and management some key questions. Negative responses indicate an area of concern and the need for board attention/direction.
- How well do we know our market environment?
- Competitors? Strengths? Weaknesses? Opportunities?
- How do our customers/clients perceive us?
- Products and customer service?
- How do other stakeholders perceive us?
- How can we improve our economic or service value-add?
- Are we focusing effectively on shareholder/stakeholder (or member) value?
- Can we gain more effective resource utilisation?
Finally, there are a few principles which make any board effective:
- Challenging, probing recommendations
- Having a creative, innovative approach to driving the organisation forward
- Thinking long term about trends and future scenarios
- Being available to management to discuss issues
- Having a comprehensive understanding of the critical success factors
- And of course, knowing what could derail them.
Tips for contributing to board meetings
Be prudent and always engage in a process of due diligence
You, as governor of an organisation are liable for the decisions you make. You always need to be able to show that you did everything you could to ensure the board made the right decisions. Always remember too, that “I wasn’t at the meeting” is not a good enough excuse. You are still held to account for the decisions of the board as a collective.
It’s a helpful rule of thumb to spend at least 1-2 hours out-of-meeting time reading up on the papers for each hour of in-meeting time.
Be brave and ask the ‘stupid’ question
Especially regarding finance! If you don’t understand, make sure you ask the right questions until you do. Set up a session with your accountant or CFO to go through the budgets until you know how the place ticks. Don’t hesitate to bring in an external expert if you need to.
Always remind yourself that you are there to add value
Any director should be motivated by the desire to add value to the boardroom and the organisation. Self-reflection after the meeting is recommended.
Adding value requires risk
Accept you will make mistakes. Governance is not about a right and a wrong answer. It is about making strategic decisions and choices about the future. Take the fear out of making mistakes by planning, measuring and reflecting honestly.