A company’s board of directors is responsible for making significant strategic and financial decisions. But how can you be sure that your board is performing in the best possible way for your business and how can you ensure that you are optimising its performance? Below is a step-by-step guide to getting the most out of your board
Set goals and responsibilities
Be clear that you and your board set business goals and assess whether your board is doing enough to help you achieve those goals. Ensure your board is aware of your key business objectives - it should approve business strategies, monitor financial performance against the company's budget and ensure that the company is compliant with legislation. The board should have a clear set of responsibilities which outline its purpose and role. Weigh up whether your board is meeting those responsibilities and whether it would benefit from fresh faces with new skills and knowledge.
Balance the boardroom
Every board should have a balance between executive and non-executive directors. Ensuring a sufficient level of balance and diversity on your board, in terms of the skills, experience, expertise and independence of directors, makes it more capable of understanding potential risks and identifying the impact of such risks on your business and its various stakeholders. Diversity of thought, experience, knowledge, perspective and understanding, ensures a balance of opinion and a broad mix of contributions as part of the decision-making process.
It is worthwhile tapping into the vast wisdom and intellectual power of your board. Use the experience and expertise of board members who can bring specialist knowledge and insights to your organisation. Seek their advice and input on key strategic decisions.
Identify board weaknesses
Identify any weaknesses on your board, for instance, a skills gap or lack of expertise with regard to corporate governance and directors' responsibilities. Such weaknesses, once identified, can be easily addressed through appointing directors who possess the required skills and through the provision of suitable training for board members.
Make time for board meetings
Make sure that directors are briefed before board meetings and receive board papers in good time, so that they have a grasp of the issues before they are discussed. Board papers should include the agenda, minutes of the previous meeting and management accounts.
Evaluate board performance
Undertaking an external board performance evaluation, by an independent assessor, enables your organisation to gain a valuable insight into the effectiveness of your board and to assess how it is operating in key areas such as strategy, business principles, risk management and internal control, performance and measurement, stakeholder management, board composition and boardroom practice.
By undergoing an independent board evaluation, you can provide assurances to stakeholders and potential investors that your organisation and board is committed to the highest standards of governance and probity.
Maura Quinn, Chief Executive, Institute of Directors in Ireland. The Institute of Directors in Ireland is the representative body for senior business professionals in Ireland. Members include chief executives, chairpersons, board members, senior executives and partners of national and international entities. The Institute offers a range of training for its members to increase their effectiveness as directors and also offers a board performance evaluation service as well as bespoke board training. For further information visit www.iodireland.ie or call 01 411 0010.