Current Trends & Solutions for Creating Effective Boards

The role of corporate boards has evolved significantly over the past decade. Today’s board must be more engaged than ever as global conditions dictate new corporate landscapes. Creating effective boards in this new landscape brings new challenges while exposing companies to a number of benefits as well.

Despite this, some still cling to the “old school” rules of an era that has long since ended. Board assessments show that those who take a primarily compliance-based approach—or that structure the process in such a way that it prevents the true examination of what a board is doing properly and what it could be doing better—ultimately lose out on the opportunity to gain invaluable insight. And context into the effectiveness of the board. 

Many current trends point towards very real solutions to all of these hurdles when it comes to creating effective boards. 

Creating Effective Boards: An Overview

One of the most effective solutions for creating effective boards involves all key stakeholders carefully overseeing strategy in a way that creates sustainable, long-term values. To reach that  point, one must understand that maximizing long-term value depends on one’s ability to solve for the now, to explore for the next, and to re-imagine what might be coming in the future.

Truly, it is crucial that organizations define both a financial and non-financial list of value drivers and include them in a strategy which accounts for investors, employees, consumers, and all other key stakeholders. It’s important to take care of the needs of today, but effective boards keep one eye firmly focused on anticipating the needs of tomorrow.

Case in point: the pandemic. In 2020, those companies that were able to come out of the early onset of the pandemic relatively unscathed were those that understood the following:

1. what their current problems were and the viable solutions to those issues
2. where their industry might be headed should things continue on the then-current path. 

That includes thinking about supply delivery. You saw grocery stores pivot to curbside pickup. You saw healthcare organizations pivot to telemedicine and digital offerings. While focusing on the now is important, successful companies understand where they are headed.

One of the best ways to create effective boards includes making sure that all involved agree on clear objectives for their own assessment. Board assessments are commonplace, but if they’re not executed properly, they can potentially do more harm than good.

Case in point: one of the most common mistakes that boards often make before beginning an assessment is failing to agree from the start the purpose of the process. While it may seem like a matter of common sense, this collective agreement is of paramount importance as it helps outline what board directors are setting out to do.

When everyone is on the same page and moving in the same direction, board members can provide the type of candid feedback that is necessary to better understand what is working and, more importantly, what isn’t. Potential roadblocks are uncovered and opportunities to increase effectiveness reveal themselves.

“Intentionality is the key to every aspect of board selection,” says a representative of Boardsi, a modern recruiting firm helping companies find top talent for their boards. “When board members are selected with intent and equipped with the tools to understand their role and best execute it, companies are able to retain their star board members and further the company’s mission.”

Without proper expectations and systems in place before the process begins, and without the commitment of all involved, an assessment is unlikely to yield the results that one is looking for. That’s why properly communicating objectives, not to mention defining the scope of the assessment, is always key.

Finally, one must recognize the fact that a strong board leader will always be responsible for driving the process of improvement. This is particularly true when it comes to board evaluations. 

An independent leader who believes in the board and believes in the assessment process is key for creating an effective board. The CEO of a business should always be involved in this process, but should not lead it. Being too close to the day-to-day operations of the company to see things objectively may hinder a CEOs objectivity. Strong team members who bring their unique and complementary talents and perspectives to the boardroom is ideal.

Board members require training just like anyo other team member. Understanding the scope of their role lays the groundwork for success. Organizations must pay attention to their board onboarding process and continuing education of executive and advisory board members. Proper onboarding builds trust and cohesion among board members. 

A solutions-based approach to choosing board members is the path forward in the new corporate landscape. With a wider, richer talent pool the onus for success lies with the corporation and its development of a proper vetting, hiring and onboarding process. Steering the ship in today’s corporate model requires embracing what worked in the past while forging ahead with an open-minded, intentional approach to constructing a board that best serves its company.