We’re grateful to have collaborated with Peter Myers of DDJ Myers to write this post.
There’s a particular concern we hear expressed over and over from CEOs, board chairs and executives. It doesn’t matter how big or small the board is, they all say the same thing: to satisfy the organization’s strategic ambitions, boards need to elevate their game. At best, only two or three of the board members are consistently engaged.
Most of their directors are missing the mark, likely due to gaps in how the board debates, communicates, frames conversations, votes and runs board meetings. These CEOs, chairs and executives worry that their best directors — the ones who are actually engaged, informed and efficient — are flight risks. They worry about board succession planning and their ability to attract younger and more diverse directors to join the board down the road.
There’s also the concern that the board, an important part of the governance structure of any organization, isn’t truly fulfilling its true potential for strategic governance.
Assessing the gaps in your board is an important step to help you make the shift to being more informed, efficient and engaging. But breaking through the low engagement barrier requires you to take a progressive approach to managing your board and choosing the technology solution to help you achieve your goals.
This is going to look different for different boards. While some board members are happy to simply show up on time, attend meetings, read the packets, discuss the particulars of the financials, and cast votes, a highly engaged board contributes more.
The more engaged members are challenging the status quo, initiating productive debate at meetings and consistently considering how they are making valuable contributions to the CEO, the organization, its customers and the community at large. The more engaged boards are opening new doors for their organization and actively advocating for how to conduct business better.
The workforce is aging. It’s a sensitive conversation to initiate, but the reality is that boards are historically older and male. Research data tells us that 73% of board chairs in the United States are over 60, and 52% are men over 65. These demographics prevail despite Catalyst research telling us boards perform better with female members. Companies with more women board directors outperform those with the least by 53%, the research says.
All publicly traded companies headquartered in California must have at least one woman on their board by the end of 2019 or they will face financial penalties. What if credit unions were next?
Organizations simply perform better when there is an environment that encourages and facilitates diversity of ideas and approaches. Having diverse voices in the boardroom increases the likelihood of those more strategic, and potentially difficult and hopefully productive, conversations. To put it more simply, the elephant-in-the-room can be more easily addressed when we all don’t represent the elephant.
Board chairs express a desire to step down to make room for the next generation, but don’t necessarily have a plan to do so. Without a date in mind to step down, there’s also no succession plan, making it difficult to actively recruit a board with more gender and ethnic diversity. There’s a distinct gap between the desire to change and the unwillingness to act.
When it comes to onboarding new members after they’ve been recruited, an efficient process helps the new directors contribute sooner. Unfortunately, many boards lack an established process to make this happen. If the board is doing the onboarding with paper, the administrator is sitting down with a new director and walking through stacks of documents and explaining dozens (and perhaps hundreds) of small details. Even if a board is using email and Dropbox to share documents, that would mean overloading the new director’s inbox with links to online folders, exposing the organization to risk.
Given that many board positions are voluntary, the experience is enough to make the new director consider whether they’ve simply taken on too much in joining a board.
New regulations require directors to have basic finance and accounting competencies to sit on a board. If they don’t have these skills when they are elected, they have six months to get up to speed. But beyond these skills, many boards also lack a diversity of functional skills.
If the elected membership comes from an operational background, it’s likely most board meetings will become focused on operations. There is a gap on many boards when it comes to technology solutions skills or enterprise risk management skill sets, in additional to softer skills such as creativity, innovation and futuristic thinking.
Ideally, the relationship between the board and CEO is a productive partnership. To make this change, meetings must be run efficiently and be full of spirited, dignified debate instead of being unnecessarily and consistently tactical.
An organized board meeting prioritizes strategic discussions on central issues, rather than time wasted on administrative details. Directors who feel prepared and educated before a meeting are better able to focus on the issues, rather than on rehashing details from previous meetings or getting up to speed.
Directors need to be able to self-manage and be accountable, and consistently consider how they can better serve the organization’s CEO, customers, and community.
A progressive board has a strong onboarding and succession plan. They want to easily swap information and poll directors. Technology should enable these goals, rather than stand in the way.
So, what can your board do to become a progressive board? Progressive technology plays a vital role in increasing engagement.
Many boards have already embraced some sort of technology solution. But there’s still room for improvement. A recent survey of directors and chairs found that 74% of credit union boards were using a board portal, SharePoint or an in-house built system, but that 31% of respondents still saw room for improvement in how board information is distributed.
Aprio board portal software is purpose built to support board activity. Features include an at-a-glance dashboard view of meeting dates and committee activities, a centralized and secure places to access board information, and easy online access to board agenda and meeting documents from multiple devices.
While Aprio’s features are certainly convenient and easy to use, they actually play a much deeper role in driving board engagement.
Retaining a highly engaged board of directors goes hand in hand with running efficient meetings and enabling efficient communications. The sooner your board adopts a progressive technology solution to run better board meetings, the sooner you’ll overcome the obstacles to having an informed and engaged board of directors.
Thank you to Peter Myers, who contributed to this post. He is the Senior Vice President at DDJ Myers, which offers strategic planning support, succession planning, leadership development and board support to financial organizations. Peter leads teams and individuals in moving forward in their organizational goals through recruitment, retention, strategic planning, board assessment and executive leadership coaching.
Interested in comparing board portal technology options? Download our Board Portal Buying Guide.
Suite 1090, 1090 West Georgia Street
Vancouver BC Canada V6E 3V7
Suite 450, 1733 H Street
Blaine Washington USA 98230