2. Board Composition<\/strong>:
\nThe first rule of board management\u2014avoid conflicts of interest. All board members should meet director independence standards and not subject themselves, their company, or your company to unnecessary risk<\/p>\nWhile race\/gender diversity mandates are drivers in today\u2019s selection process, the diversity drivers you should be paying attention to are thought diversity, industry diversity, skill diversity, and experience diversity. Selecting a board that challenges your thinking makes you a better chief executive and is far more important than having a rubber-stamp board that adds little value.<\/p>\n
Length of board term should also be considered when appointing new members, as you don\u2019t want to be wed to a board member for a long-term commitment only to find out early in the relationship the member is not a good fit (see succession below).<\/p>\n
Lastly, when developing board committees, I would recommend forming a minimum of the following: audit committee, executive committee, investment committee, nominating and governance committee, and organization and compensation committee.<\/p>\n
3. Boards Must Be Led:
\n<\/strong>As I noted above, CEOs deserve the boards they develop – a failure to lead at any level, especially at the board level, will have significant negative consequences. The concept of “tone from the top<\/em>” doesn’t just apply to employees. Just as chief executives must align expectations with their employees, they must also do so with the board.\u00a0Smart CEOs develop a framework and platform from which to effectively lead the board.<\/p>\nJust as boards hold the CEO accountable to a set of standards and behaviors, the CEO must require the same of their board. The CEO must clearly communicate what they need from board members and then demand they do more than just show up for the meetings. CEOs that allow board sessions to devolve into gripe sessions as opposed to<\/p>\n
4. Be Proactive<\/strong>:
\nThe number one rule of board management is\u00a0not<\/em><\/strong>\u00a0to hold the meeting\u00a0at\u00a0<\/em><\/strong>the board meeting. Put another way, the meeting never happens at the meeting.\u00a0As the CEO, your role in board management is\u00a0that of leader, executive, fiduciary,\u00a0lobbyist and evangelist. As such, it would behoove of you to have individual phone calls or meetings with board members in advance of the actual board meeting to seek their input and advice.<\/p>\nAlso, make sure to get a draft of the board deck out to the lead director or key committee chairs well in advance of the meeting creating another opportunity for feedback and input. Use these proactive encounters to flesh out, and seek alignment on, key issues and positions.<\/p>\n
Never reserve bad news for the actual board meeting, but rather air it out well in advance. If you\u2019re going to get beat up by your board, it\u2019s better to have it happen in private rather than on center stage where the beating can not only be more severe but where the results may also be recorded in the minutes. Never hold a board meeting when you don\u2019t know where your board stands on key issues in advance. An unprepared CEO is a CEO who will not endure the test of time.<\/p>\n
5. The Agenda<\/strong>:
\nMake sure the agenda isn’t too crowded, and that there are sufficient committee and session time available to cover needed ground. Most board meetings don’t lend themselves to being held over the course of a single day. I would suggest have committee meetings on day one, a board dinner the evening of day one, and executive sessions on day two. Having a high-powered board of directors does little good if you don’t give yourself the time to peel back the layers of critical issues.\u00a0
\n<\/strong><\/p>\n6. Display Backbone<\/strong>:
\nSmart CEOs respect their board\u2014that said, they will not allow themselves to be run over by the board, or to allow board meetings to turn into the meeting into little more than glorified gripe sessions. The board\u2019s role is one of governance, not management, and sometimes it\u2019s necessary to remind them of that fact. Don\u2019t go to the mat over insignificant issues. Be willing to compromise where prudent, but you\u2019ll also need to stand your ground and successfully make your case on mission-critical issues.<\/p>\nCEOs who make\u00a0a habit of too easily acquiescing to the board have in essence surrendered to the board. They will have lost the respect of the board and will have rendered themselves ineffective as CEO.<\/p>\n
7. Manage the Trickle-down<\/strong>:
\nRemember that what happens in the board room rarely stays in the board room. VC, private equity, or other investor directors leave your board meeting only to make a report on their observations. Non-investor board members will usually discuss the goings-on of your board meetings as well.<\/p>\nIf you conduct yourself professionally and respect your board\u2019s ability to add value, the down-stream communications that follow your meeting will advance your cause as opposed to undermining it.<\/p>\n
8. The\u00a0Environment<\/strong>:
\nWhat should be obvious, but what is often overlooked, is the importance of having your board members look forward to the meeting. In other words, make the meeting meaningful, productive, and if possible enjoyable. If your board members dread attending your meeting, they will be predisposed to show up with a bad attitude. Bad attitudes bring out the worst in people, and that is not what you want waiting for you when you arrive at the meeting.<\/p>\nDon\u2019t bore your members with meaningless\u00a0drivel\u00a0or worthless presentations. Rather be crisp in your delivery and be specific about the issues at hand. Feed them, make them comfortable, ensure they don\u2019t feel their time was wasted, or that they didn\u2019t have the opportunity to be heard\u2014have them leave looking forward to the next meeting.<\/p>\n
9. Set the Chinning Bar High<\/strong>:
\nWhile rogue CEOs have received most of the media attention in recent history, don\u2019t fool yourself into thinking that rogue board members don\u2019t exist as well.<\/p>\nRemember that\u00a0all board members are obligated to make decisions in the best interests of the company. Moreover, personally motivated decisions that speak of self-dealing will eventually come out into public view\u00a0and will be dealt with harshly.<\/p>\n
Make sure all board members share a commonality of values and vision where possible and hold them accountable to make decisions in alignment with the fiduciary obligation they assumed when they accepted the board seat.<\/p>\n
10. Succession<\/strong>:
\nMany studies show succession as a major issue of importance for boards, yet in most surveys, often more than 50% of companies feel dissatisfied with present succession practices\/positioning. The board should make great effort to ensure continuity and succession is a primary focus, roles of the incoming and outgoing CEO are clearly defined and understood, and that transitions at both the operating and board-level serve to advance the succession, not impede it. There should also be succession planning as it relates to board members as well – board member for life is not acceptable.<\/p>\nBonus – Board Development:
\n<\/strong>Regrettably, many CEOs believe their investment into the board begins and ends with compensation \u2013 big mistake. I\u2019ve always said you cannot have a growing and developing enterprise when leadership fails to invest in growing and developing itself. This applies to both executive and non-executive leadership. An investment in board development simply means the board will be better equipped to excel in the performance of their governance function, as well as to develop their ability to challenge and stretch your thinking.<\/p>\nPlease use the comments section below to share any other tips for working more effectively with the board.<\/p>\n
\n\t\t\t
\n\t\t\t <\/div><\/div>\n\t\t