Effective board management requires that directors take their responsibilities very serious, commit themselves to the process, and constantly strive to improve. It also requires a solid infrastructure to help the board and assist them to do their best work. This includes the governance processes, systems and tools for meeting planning, the creation of materials, portal management and logistics.
The most effective boards conduct a rigorous analysis of risk-based drivers and mission-critical drivers, and are focused on the involvement of the key stakeholders. This includes requesting reports about suppliers, customers and other key stakeholders’ behaviours and trends. It also includes economic headwinds and opportunity. It also means getting out in the field to see firsthand how the company operates and bringing those insights back to the board.
Most important to this pillar is the underlying trust and respect that has to exist among board members to allow for high-quality discussion and debate, including controversial questions and opinions. It is also necessary to create an environment in which it is acceptable and even expected that the board members will not agree with management.
The quality and accessibility of information is crucial for a board’s ability carry out its duties. Boards that are successful efficiently make decisions by maintaining an information infrastructure that is in line with the board’s mission, engagement model and vision for excellence. This includes a clear authority matrix (sometimes called a RACI map) that clearly identifies which individuals and groups are responsible for, accountable to, consultative on or informed about specific issues, and when those duties and roles are fulfilled.