Board Players — Challenges for the Chairman

“The king is a strong piece — use it!” Reuben Fine

Praesta has a thriving Board practice — we work successfully with individual Chairs, CEO's and Directors to help them do the best possible job. We also conduct sensitive, insightful board reviews that enable Chairmen and Directors to identify aspects of their board’s work that, if done differently, will improve its effectiveness.

The ability to adapt to changes in board membership and the organisation’s circumstances, planned and unplanned, seems to distinguish a good Chair from the also-rans. Observing Chairs at work, the best of them achieve a strong, clear framework for the board’s engagement inside and outside formal board and committee meetings; and then facilitate relevant contributions from all board members. They have a constructive, open relationship with the CEO. They retain an independent, well-informed perspective and avoid going “native”. They are attentive to what directors feel and think about the board and the business it guides and oversees, and act on the intelligence they receive. They over-come dysfunctional behaviour with a quiet, private word and, in a mature way, mentor new board members to help them make worthwhile initial contributions and avoid pitfalls.

When board chairmanship takes a wrong turn, it is usually because the Chair loses sight of what she/he is really there to do, which is to ensure good stewardship of the organisation through running an effective board. It is a mistake to let relationships, however close they are, and commitments to past decisions, however good they were, compromise this duty of care. The day a Chair feels the need to spend a lot of time in the business to keep track of how things are going, he is tacitly acknowledging that others are not performing as they should and is no longer performing her/his role.

As Chair:

• Be clear about what the business most needs from its board; what the business needs from its chief executive; and, in relation to those, what they both most need from you. These needs change over time, so revisit the subject periodically.
• Do your job and insist others do theirs. The board needs strong contributions from all its directors, especially committee chairs and the Chief Executive. Help them shape up and ship them out if they don’t make the grade.
• Run a good agenda at every meeting and across meetings. Ensure those agendas are the ones the organisation needs its board to address; and that the discussions about key topics and decisions are the ones the board deserves to have.
• Don’t let the Chief Executive dominate the board, treat it as a necessary irrelevance or be economical with the truth. The CEO is the board’s agent, to whom it has delegated executive authority for running the business; it has a right to expect openness, transparency and respect in return.
• Be alert to the possibility that independent non-executive directors (NEDs) may feel marginalised by the way you and the CEO manage the board. Stay close to your directors, find out what they really think, take notice of what you hear. Use that intelligence to make appropriate adjustments in the way the board and its committees work and how the board’s relationship with the executive is operating.
• Build a board for tomorrow, not just for today. Anticipate the skills, knowledge, experience and qualities tomorrow’s board will need and keep a constant look-out for potential candidates. Engage the CEO in that process. Use the flexibility offered by annual elections to retire directors whose currency has waned– the days of everyone serving three three-year terms are very much over.
• Focus your board on “tomorrow”. It cannot influence “yesterday”, and it is too late to affect “today”. Insofar as the board spends time looking in the rear-view mirror, then it should be to draw lessons from the past that are relevant to securing an attractive future.
• Don’t go too soon. It takes a full annual cycle for a Chair to get his/her feet firmly under the table; another year or two to refresh the board’s membership and embed changes in the agenda, structure and style of the board and its committees. Once the new way of operating has been established, it deserves to run for a while.
• Don’t stay too long. If you find yourself regularly saying or thinking “we’ve been here before” or “we looked at this a few years ago” then it is probably time to think about succession.