What is the Winning Formula® for building a great board?
Overcoming Board Development Challenges
Are you conducting truly effective and insightful board evaluations?
What do management teams really want from their boards?
Discover Key Strategies for Board Success
Foster norms and practices that encourage high-level board engagement, innovation, and performance excellence.
Discover the right balance between board cohesion and constructive conflict.
Create clarity on the respective roles and decision rights of boards and management.
Explore effective processes for developing internal CEO successors.
The specific challenges boards face have been evolving, yet the core ingredients for building a great board have remained consistent and essential. Although RHR wrote the following articles over a number of years, it is striking how relevant they remain today, especially for boards navigating the current tumultuous business and social landscape. One reason these insights have not experienced a short half-life has been the deliberate focus on identifying key actions that build and sustain great boards. As demands on boards continue to increase, these aspects are moving from best practices to ones that are becoming less and less optional.
Boards are composed of talented, highly experienced individuals who are also human. Expecting and harnessing the dynamics that inevitably arise when these individuals come together as a board can enable board leaders and individual directors to maximize their collective ability to deliver the impact needed by the stakeholders relying on them.
The power dynamic between boards and senior management can amplify the impact that boards unwittingly have on the senior team. The more clearly directors understand what senior management teams need from their boards, the more effective the partnership between the two groups. Not only does an effective board/ senior team partnership prevent the jeopardization of a board’s ability to provide good governance, but it also is a key ingredient and correlated with a company’s overall performance. This chapter highlights areas for directors to consider, probably in a more frank and direct manner than senior teams are at liberty to convey to their own boards.
Just as companies and their leaders must adapt to evolving business, geopolitical, and social landscapes in order to succeed, the ongoing effectiveness and impact of boards is dependent on their ability to embrace and foster adaptation and renewal. As changes continue to accelerate, the half-life for the relevance of a director’s prior business experience shrinks, and the overall impact of the board can rapidly erode unless the individual members and the board as a whole also evolve. This erosion in relevance and impact can occur under the radar and surface when the company encounters an unforeseen challenge or when problematic dynamics play out at the board level. However, through proactive, consistent steps, boards can ensure that individual directors and the board continue to be engaged and fit for purpose; identify the need to add directors with new experience, backgrounds, or skillsets; and avoid the dramas generated by underestimating the importance of robust renewal practices.
Two of a board’s most important responsibilities are to ensure that the right CEO is in place to lead the company (whether this person came from inside or outside the organization) and that there is an effective process for developing internal successors to potentially succeed them. Astute board leaders recognize this as an ongoing discipline maintained over the life span of a company and not an isolated event sparked by a near-term departure. RHR has written a book, Inside CEO Succession, that highlights the key elements and steps. Rather than duplicate this comprehensive resource, this final chapter was designed to provide a few observations and encourage further exploration on the topic.