This is a guest blog post and is being posted with permission from Passageways.
How does a #boardofdirectors optimize a #boardmeeting? What can they do to drive excellence amongst themselves? We explored strategies for driving board meeting optimization earlier this months during a webinar with Peter Gleason, President and CEO of the National Association of Corporate Directors (NACD), and Stuart R. Levine, Chairman and CEO of Stuart Levine & Associates LLC. They discussed a broad scope of solutions for boards that are struggling to keep the focus of their board needs directly on strategy and risk.
Improving Board Preparation
Effective preparation has four key components; pre-call discipline, creating agendas, material distribution & time sensitivity, and Leadership/Executive Summaries.
Pre-call discipline consists of minimizing director under performance. To do this, board members must stay in the loop and have a line of communication with the CEO and management. This is so leadership can understand and anticipate any questions on the minds of their director.
Creating the Agenda accomplish two main objectives: continuity in strategic conversations across multiple meetings and leaning into strategic discussions about the future.
Materials Distribution and Time Sensitivity are critical for good governance. A basic rule of thumb is materials should be distributed no later than five days in advance of a board meeting. Board portals are key to delivering on this goal; providing immediate distribution of materials that can be easily amended or revised. Timely distribution of materials provides a greater opportunity for directors to collaborate and bolsters their confidence in senior management.
Leadership/Executive Summaries pulls the most important information from each section of the board book, highlighting what management believes to be the most pertinent details.
Improving Board Responsibilities
The responsibility to improve meeting outcomes rests on both directors and management. Mr. Gleason and Mr. Levine highlighted five strategies for improving your meeting outcomes by focusing on long-term strategy.
1. Ensure directors are knowledgeable and prepared to contribute and lead on both Strategy and Succession Planning. Boards who are prepared to lead on both fronts share common strategies
Their members have access to materials that enable them to engage in a meaningful strategic discussion.
Board members interfacing with internal succession planning candidates.
There’s an active strategy for board refreshment and leadership rotation.
2. Ensure Time in Board Meetings Remains Constant.
According to NACD’s latest governance survey, public company directors spend on average 75 hours per year attending board and committee meetings and 72 hours per year reviewing reports and other material.
Directors spend an average of 245 hours per year in total on their board duties, which has seen little change over the last 3 years.
Bottom line: directorship is a significant time commitment that must be wisely and productively exercised.
3. Improve the Effectiveness of Board Meetings is a Priority
The 2016-2017 NACD Public Company Governance Survey shows that board priorities are focused on improving meeting discussions in three areas: Improving the quality of dialogue with management; Improving the quality of information provided by management; and Aligning the board agenda with the strategy.
4. Improve Meeting Preparation and Collaborative Process
Include all meeting attendees in the agenda-setting process.
Review the agenda at multiple points before the meeting, with all participants giving feedback to the chair and CEO.
Leave empty space on the agenda for each meeting to discuss urgent strategy-related issues.
Consider picking one topic for a deep-dive at each quarterly meeting.
5. Align the Board Meeting Agenda with the (Evolving) Strategy
Use every board meeting to state the current strategy, discuss progress made against specific milestones and review risks of the strategy and to the strategy.
Ensure other board meeting agenda items are aligned to the (future) strategy, including conversations about the performance of the board members themselves.
Make sure the different committees report out to the full board on issues through the lens of the corporate strategy.
You can watch the entire webinar and view the slide deck here. The discussion between Mr. Gleason and Mr. Levine was highly informative and provided concrete strategies for optimizing board performance by focusing on long-term strategy. This webinar underscores one important point, the best boards enact real tactics to execute on their long-term strategy.