As the pace of business increases the effectiveness of board management is increasingly critical. Boards need to be able to separate the “known unknowns” from the strategic imperatives that create long-term value, and guide companies towards their goals.
To achieve this, they need access to the data which allows them to detect and address emerging risks quickly and effectively. They must also be able to foster a culture of constructive disagreement and engage in open discussions that can challenge the dominant view. To do this, they should be able to cultivate their professional skepticism in a practical manner and have the courage to voice concerns both inside the boardroom as well as with company leaders.
Boards should also have procedures in place for identifying new talent, hire the candidates and integrate them into the team. The board is a living organism and as directors leave they will be replaced by those with the proper mix of experience, abilities and skills to meet the changing needs.
It is essential to have a process that ensures the decisions made by the boardroom reflect in decisions taken by committees. This is often where boards are unable to function due to lack of clarity or an incoherent approach. An effective evaluation process can help highlight these issues and provide constructive feedback to directors without singled out anyone for criticism. This can assist the board in proactively addressing any weaknesses in its leadership and ensure that it is able to accomplish its strategic goals.