Do's and Don'ts to Avoid a Stale Board
Board director Marsha Everton offers these do’s and don’ts on keeping a board fresh and nimble:
- Have annual performance reviews of individual board members as well as the full board with a clear annual decision about whether to re-elect each member to the board. This helps create a performance-based culture at both the individual and group levels. Assign responsibility to the governance and nominating committee with a report to the full board.
- Conduct an annual review of key strategic opportunities and risks for the company. Identify the board talent that can best support the delivery of the strategy and manage the risks. Assign responsibility to the governance and nominating committee with a report to the full board.
- Strongly advise or require individual board members to interact with employees and/or customers in order to keep a finger on the pulse, observe company culture in action and understand the business. The “nose in/fingers out” approach is important. It’s about understanding, not providing direction.
- Recruit directors who are curious and remain engaged at many levels as continuous learners. They will naturally bring fresh ideas and agility.
- Provide unstructured or loosely structured time for directors to interact with each other as well as with employees. This is where ideas are born and innovation happens.
- Encourage a boardroom culture in which the ability to “agreeably disagree” leads to the breakthroughs that come with constructively reviewing a range of perspectives.
- Use board diversity as a competitive advantage, bringing diversity of perspective into the conversation, thought process and decision making.
- Add at least two new board members when bringing on new directors. One is a lonely number. Two can join forces to confidently bring new ideas to the full board.
- Create an expectation that the board position is a lifetime appointment.
- Choose “big name” directors for their name and title, not their ability and willingness to contribute to decision-making.
- Have missing skill sets in the board room. The audit committee is critical and requires financial expertise – which is often emphasized over the opportunity to add marketing expertise to the board’s deliberations.
- Assign oversight of emerging risk factors like cybersecurity to a specific person or department without requiring the full board to engage in learning and decision-making.
- Engage in “groupthink.”
- Base recruitment on “who you know” rather than “what we need.”
- Fail to cast a wide net.