Bored multiethnic business people sitting in conference room
April 16, 2019
Ian Warner

How finding and closing the gaps in your board will drive engagement

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 abilityto 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.

Consider these variables when evaluating the gaps in your board  

Ideal board engagement

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.

Board demographics

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.

Director competencies and skills sets

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.

What it means to become a progressive board  

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.

Implementing a progressive technology solution  

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.

Here’s how:

  1. The software provides equal and efficient access to board information for all directors, at the same time.
    • Giving all your directors an equal voice is essential to keeping them engaged. When they have efficient and equal access to information, they in turn have an equal voice.
    • Aprio provides board administrators with an automated way to share information with all directors at the same time, eliminating the risk that some directors will access information while others won’t. There’s no risk of showing bias by emailing only half the directors, because the sharing process from within the software is automated.
    • Having an equal voice is also about the ability of directors to share their thoughts and opinions in a forum beyond meetings. Unfortunately, board meetings tend to favour the director with the loudest voice. Certainly many of us have sat on boards where the biggest talker, or the oldest man in the room, has the most sway.
    • Board portal technology democratizes the environment, giving directors a way to ask questions, annotate documents and raise their concerns online. An introverted director may not feel comfortable voicing their concern in a meeting, but because they can share it online in advance, everyone has a chance to be heard.
    • Online voting in Aprio is another way to solicit input from all directors. Each vote carries equal weight and it’s possible to come to a consensus on a time-sensitive issue quickly and efficiently.
  2. It enables directors to easily prepare for meetings, while also holding them accountable for doing so.
    • A prepared director is an engaged director. In order to have engaged directors, you need to give them the materials they need to stay on top of issues and be accountable. With Aprio, this means giving them 24/7 access to board pack materials they can read on any device.
    • Directors need board information to be easily retrievable and easy searchable, including both historical and current board documentation. The quickest way to disengage your directors is to make them hunt through emails for information that’s probably out of date anyway.
    • Giving your directors this easy access ensures you’ll get their accountability and engagement in return. Even better, you’re able to check to see if you’re getting the engagement you need to run better board meetings. Reporting metrics in Aprio will tell you if directors are accessing board materials ahead of the meeting, and if they’re reviewing all materials. When directors review materials in advance, the caliber of strategic dialogue is higher.
    • If one of your directors isn’t regularly reviewing documents, this is an opportunity for the chair to have a one-on-one accountability meeting with them to see how they can improve.
  3. It provides tools to support recruitment and onboarding to help attract a diverse crop of next-generation directors.
    • Recruiting new directors is top of mind for many boards, and demonstrating to potential members that your board is using progressive technology will help you attract the right prospects. Younger board members are already adept at using intuitive technology solutions at home and at work, and may be less than enthusiastic about reverting to three-ring binders of information and long email exchanges.
    • Beyond recruitment, you also need to be able to ramp up new directors quickly, so that they are informed and ready to make contributions at board meetings immediately. A board portal can quickly orient your new members from day one by communicating important dates and key information. Access is equitable if all new directors undergo the same online onboarding process.
    • As your new directors take on committee roles, or they simply have questions about past decisions, all the information they need is already in the portal. They can simply log in and start searching. It’s a self-serve, one-stop-shop process.
    • The built-in survey tool in Aprio also helps your new directors take self-assessment and board competency evaluations throughout the year, helping you refine your board development plans.

Engaged boards are more efficient

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.

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