GOVERNANCE : Is the board bored?

After wading through the papers, struggling to remain alert, one can only reflect – how much of this did I need to know? Often, not much. And has it assisted me in my role as director – to set strategy, to monitor and review – and to employ the CEO? Often, not much.
There is danger in the detail – quite apart from the boredom factor and the inclination to skim, thereby missing some important aspect. Too much detail and directors tend to become focused upon the past – and upon operational matters. Valuable board time is consumed, the CEO becomes agitated and time runs out to have productive and visionary conversations. There is too much time spent reflecting on the past and not enough on the future.
So what should be in an agenda? How should meeting be structured to ensure it is focused and effective because the directors are well advised?
An agenda should contain information to stimulate thinking, to advise decisions, to enable timely monitoring at high level and finally, to keep the board informed.
Background papers should include the relevant material to provide directors with the knowledge and understanding that they need to make decision. Reports need to be current and of high quality. Information should be well researched but also succinct and relevant. There should be options and recommendations with clear explanations as to why particular option has been proposed.
All agendas contain reports for review of company performance and for making sure that satisfactory progress is being made towards goals. Regular reporting is required on the financial position, on key performance indicators (key being the operative word) and on progress with strategies and key projects. This information needs to be open and clear about whether targets are being met or exceeded, or otherwise. Risks need to be identified. Management commentary should explain the variations and comment upon any action being taken or recommended to ensure that targets are met. The board should be able to monitor the organisation and the management of its risks in an effective manner.
However, there should not be an over emphasis upon the past – while learnings can be taken from the past, the focus is on the future.
Of course there are times when there are crucial decisions involving the board, and there is need for detailed reports. However, the key aspects should still be distilled into focused, clear advice.
Directors do need background information. They need to be kept up to date on the global and domestic context within which their organisation operates. They need to understand their market and their competition. They also require an understanding of the trends that will affect them; what is the likely impact of projected economic trends, of environmental issues, of climate change, of ‘food miles’, of changes in government policy, and of changes in the communities within which the company operates? Such information does not need to be provided with an agenda; it can be forwarded to directors during the month, and it should certainly be available for any strategic review.
It is the strategic process that is most important to the future of company. This is key role of the board – to set goals and the plans to reach them. This is the place for innovation and new thinking. How refreshing it is to receive papers and publications which stimulate reflection and enthusiasm.
Finally, agenda items should only be late if there is need to include up-to-date advice and information that is not available at the time of preparation.
Technology offers new direction for board agendas; papers and indeed whole agendas are often emailed. For decade or more, the use of computers instead of paper has been an option for use during meetings. However, most boards still rely upon paper; the enigma is that while computer use has increased, so has the use of paper. An opportunity for all boards however is to have confidential place within the company’s website for relevant reports, background papers, agendas and minutes. If we can trust internet banking, we can use technology in this way.
The challenge for the executive is to provide information of high quality that is relevant and efficiently presented. There needs, however, to be little more – something to stimulate and excite the imagination – to get the board thinking beyond the detail and into the future. Then we can all look forward to the courier.

Jo Brosnahan is chair of Leadership NZ, holds directorships on many other boards and is consultant in leadership and strategy.

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