Something that's disconcerting to a board of directors is that they feel that board meetings are often boring and a waste of time. According to best practices for governance, the board should be spending the bulk of their time on strategic planning and oversight. Time and again, that doesn't happen because boards haven't prioritized those duties. Making adjustments in three specific areas offers boards additional time that they can use to work on planning and oversight issues during board meetings. Productive boards: 1) have a well-trained board chair; 2) do what they can outside of board meetings; and 3) get a little help from technology.
Quality Board Chair Sets the Stage for Productive Board Meetings
The board chair is often seen only as a board meeting facilitator. The role of the board chair requires much more than that. The board chair sets the tone for the meeting and must help the board of directors maintain focus on what is best for the corporation and its stakeholders. Board chairs sometimes need board education to improve their skills.
The board chair must work collaboratively with the CEO and the Corporate Secretary to develop a meaningful and productive agenda. A good board chair will follow the agenda and not allow board members to veer off on tangents or get lost in details.
Leadership is an important quality in board chairs. Most boards of directors have precious little time to make important decisions, so their time spent on board business must be productive. An effective board chair knows how to manage meeting time so that the board has adequate time for discussion and debate. Board chairs should be able to determine when an agenda item will be more effectively addressed in a committee meeting and make that recommendation to the board.
It's important for board chairs to have good meeting facilitation skills. The agenda guides the flow of the meeting while the board chair sets the tone for the meeting. An effective board chair keeps the meeting moving along without being overly authoritative or domineering. Good chairs facilitate members bridging off each other's comments and make a point to draw less active members into discussions. The board chair should also make sure that debates factor in all perspectives and address issues of groupthink.
Productive Use of Time Outside Board Meetings Affords More Time Inside the Boardroom
Some board members mistakenly think that all board business has to occur in the boardroom. Some board business, such as voting on important matters, does need to occur during board of directors' meetings, but many boards can easily restructure their bylaws and protocols to handle routine matters outside the boardroom.
Board directors should always be mindful of the differences between their roles and the CEO's role. Board directors will have much more time for oversight and planning duties when they permit the CEO to fulfill his or her duties and they're not trying to micromanage the CEO. Board education on governance issues, such as defining roles, is always appropriate.
Board directors should allow themselves plenty of time to read the board agenda, board reports and any other materials that accompany the agenda. It's not appropriate to invest large amounts of time outside the boardroom engaging in debate about various agenda items. It is appropriate to ask questions about facts and other information to clarify the reporting person's point of view. Typically, the best points of contact for questions are the Independent Lead Director, the committee chairs, the Chairperson or the CEO. This step ensures that the board will have a good understanding of what they will be discussing and won't waste time on clarifying questions.
Board directors should declare any conflicts of interest before a board meeting starts. Those who have conflicts with positions related to compensation committees, vendor relationships, family members in executive positions or other long-standing relationships should determine before the meeting whether they should abstain from certain voting matters or resign altogether. Complex situations may call for the board of directors to review board policies outside of board meetings and come to meetings prepared to settle matters based on facts.
Unanimous consents are routine matters that the board chair recommends where there is almost always unanimous approval. As long as the bylaws allow for it, boards can conduct approvals for unanimous consent outside of board meetings.
Most Board Work Happens in Committees
The lack of productivity in meetings brought the term 'death by committee' to life. The reality is that having the right people on the right committees allows boards to dig deep into hard issues in shorter amounts of time. Focused and productive committees will return to the board with informative summaries of their work and solid recommendations, saving the full board much time. It's important to have diversity on committees, but it's more important to have the right expertise on committees, especially with regard to the compensation, audit and governance committees. Board members should look for opportunities to serve on committees where they can offer their skillsets. If a committee doesn't have vacancies, they may attend as a guest or observer and request to join the committee when an opening occurs.Inviting Input and Expertise From the C-suite
Members of the C-suite, other than the CEO, may occasionally attend board meetings. Board members may find it helpful to gain insight from members of the C-suite whom they see less often. It's appropriate to invite one of them out for coffee or a meal and have a light-hearted exchange of information. Board members may also schedule time to meet with executive managers in their offices or in the field. Directors may request these meetings as needed, but not excessively.How a Board Management Software System Creates More Board Meeting Time
Boards that wish to add productivity to their board meetings will find that it's easier to do so when they make use of software solutions for governance such as Governance Cloud. Diligent's Governance Cloud is a centralized suite of secure digital tools that helps governance leaders add value in the boardroom and beyond.
Diligent's board management system helps boards gain time in the boardroom, providing an online space to assemble, distribute and collaborate on board materials within the security of a board portal platform.
Within the ecosystem of Governance Cloud, board and committee members can meet in virtual data rooms outside of board time where they can collaborate and exchange information confidentially. Diligent's board management system lets board administrators get board books out sooner, which allows board directors ample time to prepare for meetings.
Board directors can use software tools to manage electronic voting on important matters during meetings or to approve board minutes and unanimous consents outside meetings. The suite of tools includes additional software solutions for D&O questionnaires and board evaluations, which are fully integrated into the board management system. Board evaluations will highlight the need for board education. Diligent is committed to providing a total Enterprise Governance Management system with innovations for today and the future.