Effective board management requires that directors take their responsibilities very seriously, dedicate themselves to the process, and continuously strive to improve. It also requires a solid infrastructure to support the board to perform its best job and boosts the efforts of board members as well as the management team. This includes the governance tools, processes and systems in place to manage meeting planning, development of materials, portal management as well as logistics and communications.
The most efficient boards are those that conduct a rigorous analysis of critical drivers and risks to mission and focuses on the involvement of the key stakeholders. This includes requesting reports on customer, supplier and other key stakeholder behavior and trends as well as opportunities and headwinds in the economy. This also includes going out in the field to observe how the company operates and bringing those insights back to the board.
This pillar is built on the trust and respect between board members, and must be in place to allow quality discussion and debates. It is also important to create an environment in which it is normal and acceptable that the board may disagree with management.
The capacity of the board to do its job depends on quality and accessibility of information. Leading boards are able to effectively make decisions by maintaining an information infrastructure that is compatible with the board’s mission and engagement model, as well as its vision for excellence. This includes an authority matrix (sometimes called a RACI map) that clearly identifies which individuals and groups are responsible for, accountable for being consultative or informed about specific issues and when those roles and responsibilities are met.
