Effective board management requires that directors take their responsibilities very serious, commit themselves to the process, and strive to improve. It also requires a strong infrastructure to support the board and help them achieve their best results. This includes the governance tools, processes, and systems that are in place to handle the scheduling of meetings, the development of materials and management of portals, logistics and communications.
The most efficient boards are those that undertake a thorough analysis of critical drivers and risks to mission and focus on the engagement of key stakeholders. This includes requesting reports on suppliers, customers and other key stakeholders’ behavior and trends. Additionally, it involves economic headwinds and opportunity. This involves going out to the field and seeing the way the company works in real-time. Then, bringing these insights back to the board for discussion.
This pillar is built on the trust and respect between board members, and must be present in order to allow for good debate and discussion. It also requires an environment in which it is acceptable and even expected that the board may disagree with management.
The ability of the board to perform its job depends on quality and availability of information. Boards with a strong reputation are able to efficiently make decisions by maintaining an information infrastructure that is in line with the board’s mission and engagement model as well as its vision for excellence. This includes an explicit authority matrix (sometimes called a RACI map) that clearly defines which individuals and groups are responsible for, accountable to consulting on or being informed about particular topics and when those obligations and roles are fulfilled.