The role of a company’s board of directors has never been as important as it is today.
In a rapidly changing market defined by expanding regulatory responsibilities, accelerated technological advancements and ultra-aggressive competition, it has become paramount for members of a company’s board of directors to think strategically, be flexible enough to adapt to change, and act proactively to guarantee success for their firms.
With this in mind, what are some of our main tips for board members or budding directors looking to effectively lead their organisations into the next decade.
1. Let’s review our top 3 tips Understand Your Company’s Culture, Mission, Goals and Expectations
It might sound obvious, but board members should have an in-depth understanding of their company’s mission, goals, corporate culture and overall expectations.
As explained by Karima Mariama-Arthur, Founder and CEO of WordSmithRapport, in an article for Entrepreneur, all board members must be equipped with certain knowledge that will allow them to perform at their peak.
First, all board members should know what their main responsibilities are. Mariama-Arthur writes that all directors “should know what is generally expected of the collective” and “also know what is expected of them individually.”
Second, Mariama-Arthur explains that directors “need to know where an organization wants to go in order to help it get there.” Therefore, board members must have a complete understanding of the company’s overall mission, its short, medium and long-term plans, and how it expects to accomplish what it has set out to do.
In turn, board members must be ready to contribute their own ideas and “add value by illuminating their voices and actively collaborating to move the collective vision forward.”
Finally, board members should have thorough knowledge of the company’s corporate culture.
Mariama-Arthur says board members should understand how a company’s “values and norms drive interpersonal interaction and everyday decision-making,” and see “first-hand how employees interact with one another, as well as with its stakeholders.”
“It’s essential for new members to be privy to the traditions, values, and policies that speak to an organization’s wellbeing,” Mariam-Arthur concludes.
Paul Nelson, a Senior Manager with Babcock International Group, would add one more item to this list—having a solid understanding of the numbers.
Nelson, who’s attended courses offered by the IoD Academy, believes “finance is clearly a key driver” towards an individual’s growth as an efficient board member.
“Having an understanding of how the business operates and the financial decision-making behind it is a key part of that growth,” Nelson says.
2. Communicate Often and Extensively with the CEO, Management and Other Board Members
According to Mark Suster, a successful American entrepreneur-turned-venture-capitalist, communication is primordial to being an effective board member.
On his blog, Both Sides of the Table, Suster emphasizes the need for board members to hold discussions with other board members and the CEO prior to entering a board meeting where decisions will be made.
Suster writes: “If a conversation happens between the CEO and each director then each side knows what we’re trying to achieve with the in-person meeting. We can agree mutual concerns, we can agree scope, we can discuss controversial topics and the director can let you know if he/she feels something is missing from the agenda. A director who hasn’t had a pre-conversation with management will not be as effective in the board meeting.”
In the same vein, Suster believes non-management board members should have a strong working relationship, one that will allow for easier decision-making and problem solving.
Suster believes “the best functioning boards are groups of individuals who all know and trust each other — even if they don’t necessarily agree on every topic.”
“By building ‘outside the board meeting’ relationships I find that I can more easily resolve difficult issues when they arise,” Suster concludes.
Ultimately, Suster says, most of the work happens outside the boardroom during interactions between a company’s CEO, extended management team and its board members.
Suster explains: “If you think about the span of a 5+ year board working with a company you begin to realize that a board meeting isn’t the real value driver so much as what happens outside of the board meeting. A board meeting should be the place where we take the legal decisions we have already discussed and debated as a group.”
3. Become a Certified Director or Join a Relevant Professional Organization
Knowledge is King. Hence, any board member will significantly benefit from continuing their education and training on how to best lead their organization from a position of power.
Certain individuals in leadership roles would benefit greatly from joining a relevant professional organization like the Institute of Directors (IoD). Here, members have access to countless networking opportunities, seminars, workshops and conferences, a wealth of business information, and a platform where to exchange ideas and perspectives with likeminded leaders.
The IoD offers a professional qualification pathway to allow candidates acquire a Certificate, a Diploma and ultimately a Chartered qualification in Company Direction.
As brilliantly summarized by Steve Giles, one of IoD’s Course Leaders, “There is a growing understanding that if we want to be more professional in our business lives, part of that involves a commitment to continuing our education. To be credible as a business leader you’ve got to be up to date, and you’ve got to keep abreast of modern thinking.”