A few days ago, I wrote an article about the need for startup companies to have a good Board of Directors (BoD) from day one. I had a few lines about the notion of “good Board” but too few to my own and my readers’s satisfaction. So i will go a bit further here.
What I pointed last time as a first step was to choose a good Chairperson i.e. someone who will care for the success of the business, someone senior who can manage meetings adequately and someone who has “a strong voice”. Actually the perfect Chairperson is more than that. In any board, in any company or non profit organization, big or small, the Chair (in this article I will use the word “Chair” to designate “Chairperson” for the sake of simplicity) is key as a balancing agent and a catalyst. That’s why the rules of conduct of corporate governance strongly recommend to separate the function of CEO from the one of Chair. This is going against the idea of “PDG – Président Directeur Général” still quite common in France for example.
I recommend that any Chairperson consider this:
Making sure that the Board’s composition is optimal
This is a key point to consider . As I already pointed out in my previous article, a good balance is needed between executive and non executive directors. Balance of skills, competencies and experiences is as important. But it’s not only about cv’s ! Personalites should also be examined. It’s good to have some devil’s advocate in the group, it’s recommended to mix entepreneurial, risk taking, minds with more conservative and careful heads. It’s also great to have people able to see the big picture while others are caring for details. Finally, all should have a strong sense of the ethics linked to their function, especially a clear sense of the company’s interest first. It means that the Chair should have thorough discussions with shareholders about the board “casting”. Promoting a regular turnover of Board members helps keeping a good balance. The Chair should care for it.
Interacting with other Board members outside of the boardroom
It’s a pity to see Boards limited to boardroom interactions. Opinions on future decisions should better be examined in separate one-to-one meetings at the Chair’s initiative. Board members can voice their concerns in a confidential setting. They will also be better prepared for the coming meetings. The Chair should be neutral here as his or her role commands. (S)he should ask relevant questions, listen carefully and probe the Director’s opinion, not impose his or her one. This may seem sometimes hard for some strong personality Chairpeople but it’s indispensable !
Setting the numbers of meetings and the agenda of each meeting with care and thoughtfulness
This may seem a trivial point but in my opinion it’s a major concern. Especially when the CEO is a strong leader, which is what we expect from her or him, (s)he wouls have a tendency to control the Board. A number of Chairpeople let the agenda decided by the CEO letting him or her control the discussion flow. Meetings are always too short to cover all points of an agenda. And long, endless board meetings are ineffective. I’ve seen a lot of agendas in my life and most of time they are overcrowded. Sometimes eight to ten issues to discuss on the same half day or evening ! Or it can be the opposite: two or three general points with no focus. Neither is good. The Board should focus on real Board issues, period ! A Board meeting is not a place to inform about issues, it’s a place to decide about issues. It’s not the same. The Chair should care for that. Decide on the agenda, decide on priorities and make sure that no important point that management wants an agreement on is put at the end when no time is left to discuss it freely and profoundly (this is by the way a well known tactic used by CEO’s to get a point easily approved…)
Managing meetings in the most efficicent way
Again this seemingly trivial consideration shows the difference between a strong and a weak Chair ! The agenda having been set, it must be respected with an equal distibution of time. I’ve attended numerous Board meeetings where timing is non respected leading to some prominent Board members leaving the room before the end of discussions. This is generally due to a lack of focus and never ending talks lost into details. In these situations it seems that no one dare to remind the Chairperson that (s)he is the guardian of time. (S)he is also the guardian of the debate’s quality. The Chair should care for reminding board members that they should be clear and focused. (S)he should split time evenly, inviting silent individuals to express themselves while reminding talkative ones to refrain from talking too much. The Chair should then summarize points of views and lead to decision making preferably through consensus.
Following up on decisions after Board meetings
A good Board meeting always ends with a document called “minutes of meeting” written by he Board’s secretary. Besides notable comments of Board members, it should include a list of decisions and a “to do list” until next meeting. It’s not unusual to see some “homework” given by the Chair to Board members in preparation for next meeting (an issue to investigate, a report to pre-read, some figures to reflect on,…). Actually, i recommend it firmly. This is keeping Directors under pressure and is always reminding them of their responsibilities. Time is scarce and procatrination is frequent. We should always avoid Directors coming to the boardroom poorly prepared or unprepared at all. The Chair should order the Board’s secretary to have a regular recall procedure a few weeks or days before next meeting. But this is not the most important. The Chair should hold regular meetings and talks with the CEO to insure follow up on key strategic decisions (strategy moves, investments, management hiring…). In bigger companies, (s)he should do the same with board’s sub-commitees (audit, compensation,…).
I could write a book on this subject ! There are a number of roles and tasks dedicated to the Chair I didn’t even touch here (inside and outside representation and PR, chairing in times of crisis, realtionship with CEO and executive committee, etc.). Most of the Boards I attended in my life were poorly managed due to lack of adequate chairing. Even with prominent, competent and highly experienced members, a Board without a great Chairperson cannot work greatly !
Be inspired !