One of the things I’ve learnt in my 25+ years of board meetings is that effective company boards are those properly prepared for their meetings. Conversely, unprepared boards make for unproductive companies.
As I’ve discussed before, a well-constructed board can add enormous value to a business, although a culture of commitment to proper preparation is essential to maximise the benefits.
Preparation starts with the board calendar – setting down all the areas the board needs to look at over the year, the frequency of these discussions and the time allotted to each discussion. This is mapped to the board meeting schedule to ensure that everything can be properly covered and that the frequency and length of the board meetings is sufficient to give proper coverage of all items. It will also allow board members to prepare for the less-frequent items well in advance. Remember, too, that some more complex and time-consuming issues can be delegated to board committees that will meet separately on these issues and then report back to the board at appropriate times, summarising their discussions and/or recommendations.
Ideally, the [independent] chair and the CEO should meet 2 weeks before the board meeting to finalise the agenda, adding to the calendar any new items that need discussion at the meeting and agreeing on the board papers that need to be sent out for the meeting to achieve its objectives.
Board papers, including the agenda, should be sent to all board members at least a week ahead of the board meeting, to allow each board member adequate time to prepare by going through the papers and obtaining any additional information necessary for proper understanding.
Board meetings need to be run professionally, controlled by the chair: starting on time, adhering to the agenda, and the time allotted for each item. It is bad practice to leave agenda items out of the discussion simply because the board is running out of time and such omissions potentially lead to bad consequences for the business. All members must be encouraged to actively participate in discussions, too, to ensure full coverage.
Once the meeting has concluded, it is essential that the minutes, with action items and any additional papers referred to in the meeting, be sent out promptly: ideally within 2-3 days and no later than 5 days after the meeting. This will allow the board members time to ensure follow-up items can be actioned and reported on at the next meeting.
Although board meetings are viewed by some as of doubtful benefit and more a “tick the box” exercise, the results of having a properly constructed board which is committed to the governance, leadership and strategic direction of the business, while delivering shareholder value, is clear in terms of company growth and valuation.
And it’s not just for large companies – SMEs benefit proportionately more from this through accelerated, sustained growth and valuations up to 40% higher than less well-governed companies.
#BusinessFitness #Boards #Leadership #Strategy
P.S. If you’re unsure of what a board calendar might include and/or look like, please DM me and I will send you a sample one.