The business environment and stakeholder priorities shift in subtle and profound ways. In such a dynamic board environment, effective governance is essential for the long-term prosperity of a company. There isn’t one solution that is universally applicable but the most effective boards use proven approaches to gauge, guide and improve the efficiency of their board.
These best practices involve a clearly defined evaluation process, a board development culture and the use of digital tools to increase efficiency and transparency. These tools and techniques assist evaluate the effectiveness of the board in its role as trustee, fiduciary, and representative of the company. They also encourage collaboration among directors.
Conducting an assessment requires board members to commit their time and provide honest feedback. Boards must define their goals and discuss them in the beginning. Boards can also make use of boards’ portals to allow directors to share ideas and information, and track progress toward the objectives.
Another important factor to consider is the structure and composition of a board. This includes the size of a board, as well as the number of committees formed, as well as the often these committees meet. Make sure that the committees are sufficient size to handle their workload, and that they remain focused on the long-term value drivers of the company.
The chair’s ability to facilitate productive board discussions and decision-making processes is also vital. This includes the chair’s communication and relationship-building skills with the board, other directors, and management. The chair must also be open to constructive criticism of his or her leadership.