BOARDS NEED STRUCTURE TOO

By Greg Niemi . February 12, 2013

No one likes a run-on board meeting – not the business leader or the board members themselves.  So why do board meetings run on?  We need to be sure we address the cause and not just fault the symptom.

Gavel, Board of Directors IconMost board meetings run-on at ad nauseam due to lack of structure.  Causes for run-on meetings stem from a variety of maladies as simple as no clear set agenda, no person accountable to keep meetings on track or a lack of clarity of expectations for all board members.  In the absence of structure everyone is left to their own devices.

It has been my experience that most every board member, particularly in for-profit businesses, desire to do a good job for the company and want (& need) to know the parameters expected of them.  Boards will work wonders for you if you provide clarity of their roles, responsibilities and expectations.

The first place to look for definition of roles and responsibilities is within corporate documents such as articles of incorporation, by-laws, shareholder’s agreements, etc. that the organization may already have and must comply with.  Short of pre-defined requirements develop your own guidelines apropos to your business’s needs.  A board org chart and a simple job description for all board members will go a very long way for you.

Develop a letter of understanding, or better yet a board members handbook, which outlines general guidelines for roles, terms & term limits, frequency of meetings, rules of order (if any), voting requirements (if any), compensation and provisions to allow for the removal or resignation of board members.

In the guidelines clearly stipulate whether the board is to be advisory (e.g., idea incubator, sounding board), governing (e.g., has fiduciary responsibility) or an operating (e.g., controls the day to day operations) board.

Advisory —— Governing —— Operating

The degree of authority may vary, or change, on this continuum depending on the business needs and structure.  Furthermore, the degree of control (or the absence thereof) granted to a board may also swing along this continuum like a pendulum from passive, to more engaged to completely controlling if you allow it too.

In addition to a org chart and job description, I recommend instituting guidelines for board etiquette be discussed and developed to expressly state what is valued (e.g., honest intentions, opinions, expertise, etc.) and what is not (e.g., going off topic, dominating conversation, etc.).  These values should be in the forefront of every board meeting.  At least once a year revisit this or brainstorm anew with all involved what is expected to get the most out of our board.

In summary, ineffective boards usually stem from lack of structure.  It is best not to not leave board members guessing or groping for clarity on expectations.  An easy to bring clarity to this is with a simple org chart, a job description and mutually developed guidelines on how to get the most out of board meetings.  Said another way, levels of empowerment need to even be defined for boards.

In my next blog I will delve more into board development and board governance processes to answer how to have the very best board.  Here is a quick hint for you:  it begins with talent.

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