Making Your Board Effective

Recently at Natadola Beach in Fiji, I ticked an item off my bucket list. I wobbled all the way to shore on one of those 1960's longboards. That night as I walked along the beach, reflecting on my surfing prowess, I had a phone call from a colleague who was having a very different board experience. The Board of an organisation he was involved with had been disbanded in a dysfunctional mess. He was enquiring if I knew anyone who could help. I did indeed. Louise Broekman is a small-framed, big-hearted business dynamo who has founded the Advisory Board Centre. She also Chairs our Advisory Board at FRI and knows a lot about what works and what doesn’t. So the following morning, while sitting on the beach watching the local board riders do their thing, I phoned Louise for some tips on how to ensure Boards function effectively. She generously rattled off a number of thoughts which I have summarised below. If your organisation has a Board, or is thinking of starting one, you are sure to find these useful. Some are also relevant to Franchise Advisory Councils.

6 Tips to Improve Your Board Skills

1. Be clear on the difference between a Board of Directors and an Advisory Board. The purpose of the former is for the Directors to make strategic decisions which are executed by the CEO (and for which they are responsible), whereas the purpose of the latter is for members to provide advice to the CEO. For this reason Louise advises members of Advisory Boards not to call themselves Directors, as this could make them liable for decisions for which they are not responsible. 2. Have a code of conduct to guide how discussions will be held. Louise believes respect for the CEO’s role is particularly vital. For instance she often hears members of Advisory Boards saying to a CEO “What you should do is…” While this may be well intentioned, she says it undermines the CEO’s authority and creates unhelpful noise in meetings. Respectful listening in meetings is essential, rather than Board members coming with predetermined opinions. 3. The relationship between a CEO and chairperson is particularly important. Louise recommends the chairperson has regular discussions with the CEO between meetings to provide moral support, refine agenda items and agree on the best process to address issues on the agenda. 4. A good agenda should define the purpose of each discussion item. For instance are you wanting Board members to provide feedback on a proposal, explore alternative solutions to a difficult problem, or reach consensus on an important strategic decision? Louise says a lot of Board dysfunction comes from confusion over how agenda items are being addressed. 5. Separate discussions that involve exploring information from discussions that are aimed at reaching conclusions. Louise says Board members need to prepare well for meetings and not jump too quickly into decision-making before considering all facts and options. 6. Maintain a clear line of sight into the health of the culture. Unlike poor financial performance, cultural problems can be filtered by a CEO. In a franchise network this may involve significant franchisee unrest. Louise says having metrics on franchisee satisfaction from third party surveys is important for Non-Executive Directors as they will ultimately be held responsible if systemic conflict or litigation damages the brand. Franchise networks need good governance to protect the interests of all stakeholders, and a Board or Advisory Board is a great investment, providing it is structured effectively.