Webinar recap: Seamus Gillen, author, board consultant, and CEO of ValueAlpha, explores the factors that drive board decision-making – and how boards can optimise their processes to fuel better decision-making.
Board directors are no strangers to decision-making. Day in and day out, boards are responsible for making decisions that impact on the organisations they serve. The pressure’s on to get it right.
But what can a board do to consistently achieve high-quality, strategic decision making?
According to author, board consultant, and ValueAlpha CEO Seamus Gillen, there are four critical drivers that determine whether a board’s decision-making is high quality and strategic:
- Is the board addressing the critical issues?
- Are those sitting around the table the right people to be discussing these issues?
- Do board members display the appropriate behaviours?
- Is the board process sound?
At a recent ATLAS Leadership series webinar, Gillen joined OnBoard’s Chief Product Officer Martyn Chapman for a discussion laser focused on the last bullet point: ensuring the board’s decision-making process is sound.
During the session, Gillen and Chapman explored the four key time periods that impact board decision-making:
- One week before the board meeting
- One hour before the board meeting
- During the board meeting
- In and around the board meeting
They discussed key challenges during each time period – and what boards can do to optimise each stage for better decision-making.
In this post, we’ll share some of the key takeaways from this session.
One Week Before the Board Meeting: Distributing a Quality Board Packet in a Timely Manner
Great board meetings don’t happen by chance. Rather, they require thoughtful planning. A key part of planning for a board meeting involves creating effective board books – and then distributing them in a timely manner so each board member can adequately prepare.
Yet, a poll found three-quarters of webinar attendees don’t feel their board packets are fit for purpose. “I have found this all the time in my work,” said Gillen.
Oftentimes, board packets are excessively large, and they’re organised in a way that makes it difficult to digest the material. Gillen shared an anecdote about a board for a large bank in the UK that meets 10 times per year and has 3,000 pages in their board packet each month. Of course, financial services are heavily regulated, but he went on to say that boards across all industries often have board packets that are simply too large. “You don’t have to be a bank…you can be a not-for-profit, you can be in higher education, you can be in a sports sector, and your board packet will still be too much to read,” he said.
One reason for the growing size of board packets is unmanaged requests for additional data. According to Gillen, an important way to reign these requests in is to have the chair, CEO, and secretary get together and plan a strategic board agenda for the next year’s worth of board meetings. “Everybody should have visibility into that agenda,” he explained. “There should be an agreement, as those meetings approach, about what those papers are going to look like and what the board wants out of those papers.”
What is the ideal size of the board packet? Each business is different, so there’s no hard and fast answer. However, Gillen believes that board meetings should ideally have no more than eight or nine agenda items, and board papers should be no more than six pages long. “We have to give directors the proper opportunity to digest the information really, really quickly,” he explained. “The rest can be found in the reading room of the board portal.”
Boards must also ensure board packets are distributed in a timely manner. Gillen shared a story about a director who left for a board meeting that was two hours away. By the time the director got out of the car, where the meeting was being held, another 10 pages had been added to the board packet. “That’s not just unprofessional,” he said. “That’s unethical.” Of course, the director didn’t have a chance to properly review the added material prior to the meeting.
One Hour Before the Board Meeting: Ensuring All Members Arrive Prepared for Productive Discussions
The most productive board meetings are those in which all members show up prepared and ready to engage in discussions. Yet, a poll of webinar attendees found that only a quarter feel all their directors show up properly prepared for the board meeting.
A survey conducted in the UK a few years ago found that the average board packet at a Fortune 100 company typically takes about seven hours to read. Yet, non-executive directors said that on average, they spend about three and a half hours reading the board packet. According to Gillen, “the biggest cardinal sin is failing to read the board pack before they turn up. That’s unprofessional.”
Of course, reading the board packet in advance is key. In addition, Gillen said it’s a good practice for the secretary to call all the board members before the board meeting. In those discussions, the secretary can ask the director questions including:
- Are you happy with the board packet?
- Do you understand all the issues?
- Is there anything that you need to discuss with any other directors?
“People need to talk to each other before the board meeting, get any issues out of the way,” Gillen said. “That way, we can actually spend the board meeting having a quality discussion.”
Gillen also recommended directors make it a point to connect with those in the company face-to-face. “It is time for directors to get back to visiting the organisations for which they’re directors,” he said. “Head to the head office. Have lunch. Talk to people in the corridor.”
During the Board Meeting: Keeping Meetings Productive and Forward-Focused
Board meetings are a golden opportunity to have productive discussions and make impactful decisions. However, just half of the webinar attendees said they’re happy with the way their board meetings unfold.
“Board meetings can get out of control pretty quickly,” said Gillen. There are people who speak too much, and there are others who don’t speak enough. In addition, meetings often go in unanticipated directions. “It’s a really, really difficult process to manage,” Gillen added.
Gillen said a key problem with board meetings is that too much time is spent looking backwards.
“Boards should be spending 80% of their time looking forward and 20% of the time looking back,” he said. “ In fact, they do it in the inverse proportion. And that’s a waste of time spending 80% of your time looking at things that you can’t any longer do anything about.”
Gillen also mentioned that timed agendas are worth exploring as a way to keep board meetings on track. However, he advises that boards be flexible. Sometimes, a discussion needs to take longer than planned – and that’s not necessarily a bad thing.
In and Around the Meeting: Committing to Continuous Learning
Continuous learning ensures board members have the skills and knowledge needed to make the best decisions – both now and in the future. Yet, a mere quarter of webinar attendees feel their directors are focused on their ongoing professional development.
“I find that directors think they are omnipotent, omniscient…that they don’t need to continue to invest in their professional development,” said Gillen.
Gillen believes it’s a good practice for the secretary – along with the chair – to set out a training plan for the directors on the board and ensure directors are accountable for that training. “There should be a proper program of training,” he said.
In addition, behaviours can be an issue on the board. “There should be mentoring and coaching available for directors who need to learn how to behave on a board,” said Gillen.
Finally, Gillen said that professional development should start as soon as a director joins the board. “Professional development starts with the introduction onto the board,” he said. “If you cannot get your directors up to speed quickly in terms of board process, they will never catch up and they will be suboptimal the entire time they sit on the board.”
Join us for Part 2 of the webinar series that will be dedicated to exploring the pivotal role of the chair in the boardroom and its profound impact on effective governance. Register Now!