Webinar Recap: Corporate advisors Max Franchitto and Tamara Barr discuss strategies to enhance efficiency in corporate board meetings.
Optimising performance helps boards drive strategic growth and ensures effective governance. However, boards often get overburdened with administrative tasks and ineffective members, detracting from their ability to focus on strategic decision-making.
In fact, our recent Board Effectiveness Survey revealed a surprising statistic: Out of 350 responses from corporate board members and executives, 17% of board members are rated ineffective in their roles.
In a recent webinar, Max Franchitto, Corporate Advisor and Founder of MGF Consulting Group and Build Your Board, andTamara Barr, Founder and Managing Director of CSB Corporate Services, joined us to share key strategies to enhance boardroom efficiency and improve collaboration between directors and the board chair.
Read on for some top takeaways from this session.
Making Boards More Effective
The session began with the participants offering suggestions to improve board member effectiveness. Webinar host Josh Palmer,head of content and research at OnBoard, said effectiveness requires members to prepare for meetings by reading board materials and understanding key topics, participating in discussions, and collaborating with peers on the board.
Barr shared 3 tips for effective boards:
“As long as we have agendas written strategically and minutes written well, then we can push those action items through to make sure the board and the company underneath that board is effective,” Barr said.
Encouraging Stakeholder Engagement and Collaboration
Next, the discussion pivoted to stakeholder engagement, particularly how to encourage participation from members who don’t contribute to meetings, despite having a clear agenda or detailed meeting minutes.
“We would encourage the board to do an independent board review, and part of that independent board review is a peer review of yourself as a director,” Barr said. “That’s how we can start to find capability gaps and understand where the ineffectiveness is coming from, whether they feel like it’s coming from individual directors, a chair that’s not strong enough, or possibly a governance person that doesn’t have the right frame of mind to be in the seat.”
Franchitto mentioned how he uses the term “sleeping directors” for those who don’t participate, and said it often results from members who likely serve on the board for the wrong reasons.
“I often say to directors, ‘What’s your purpose for being here? Tell me as a board member, what is your input and how big of a hole is it going to leave when you move on to your next board?’” Franchitto said. “If you can’t determine any of that, then maybe you’re a sleeping director and it’s time to move on.
“If your purpose is to fatten up your CV, then you can sit quietly in a corner and contribute nothing. But if you have a greater purpose, then you need to act accordingly,” Franchitto added.
Bringing New Members Up to Speed
All new members require onboarding and should be afforded time to get up to speed and become productive members of the board. However, Franchitto said all boards need to establish benchmarks to ensure new members begin to actively engage. He likens it to the 90-day grace period new presidents typically enjoy in the U.S.
“Sooner or later, you’ve got to start making an impact. You’ve got to challenge the conversation. You’ve got to make statements that are purposeful and directed, because after all, your job description includes the title director. And what do directors do? They direct,” Franchitto said.
How the Chair Can Improve Participation
The participants talked about how boards need a strong chair who facilitates discussion with all members and isn’t afraid to speak up when they fail to share their opinions or join in the discussion.
“It’s important for the chair to throw to different directors around the room,” Barr said. “When you look at your board skills matrix, you’ll hopefully have directors with different skill sets. Also, if you have committees, the board chair should ask the chair of the committee to open up and talk about what happened at the recent committee meeting or what the committee has endorsed.”
In-Demand Director Skills
Members of a board typically bring a diverse blend of skills to the boardroom, from finance to legal, yet both participants agreed practicing good governance is the most in-demand skill for members of modern boards.
“Directorship has become a little diluted over the years as to the importance of understanding governance goes beyond sitting on a board. Some people join a board, and they think it’s a generic business discussion group when governance is a real issue,” Franchitto said.
Many executives take a director’s course early in their career to learn the ropes, Franchitto said, yet they fail to keep up with trending corporate governance matters moving forward.
“Imagine if your GP was that with their practise, you’d get diagnosed with all sorts of funny ailments,” Franchitto said. “I always say to my students, ‘Governance is the best subject you can study because it’s a living organism. It changes almost daily.’ You can’t pick up an Australian financial newspaper without seeing some element of governance being discussed, challenged, or scandalised.”
Managing Conformance vs. Performance
While boards should be laser-focused on strategic policymaking to govern their organisations, they often fall into a trap of spending too much time in the weeds micromanaging operational matters.
“Boards are about two basic elements, conformance and performance,” Franchitto said. “In the two decades plus that I’ve been working with boards, I’ve found an extraordinarily high amount of time being spent on the conformance.”
To demonstrate the concept, Franchitto presented a graphic from Robert Tricker, a leading expert on corporate governance.
“On the left-hand side, there’s not a lot of time being spent on performance activities, and that drags the growth of the organisation from a strategic point,” Franchitto said. “Let’s assume your board meeting was four hours long. If you’re spending an hour in each quadrant, it’s probably the wrong balance. I’d like to see you spend more time on performance, because accountability to external statutory bodies should be your bread and butter.”
Levelling Up Board Governance Skills
To wrap up the session, the panelists offered their opinions on how new board members can quickly learn the ropes and level up their skill sets.
Franchitto said he recommends two tips when he advises young directors: Read and ask, “why?”
“When you’re sitting on your first board, don’t be afraid to be the ‘why’ person in the room, because the answer to ‘why’ is an interesting conversation,” Franchitto said. “Don’t be afraid to ask, ‘Why are we doing this? Why are we making this sort of decision?’ Because the answer will educate you.”
Barr suggested new board directors find experienced mentors and ask them about their experiences when things didn’t necessarily go as planned.
“Rather than talking to them just about how to perform on a board, talk to them about their experiences where things went wrong, because that’s where we learn from history of why laws changed, regulations changed, governance has changed, and why the new way of things is leading to better governance.”
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