New Year Intentions for Making Boards Work Better

tickAccording to recent McKinsey’s insight most directors don’t understand the company’s strategy and prioritise short –time gain at the expense of creating long-term value.   Boards are not delivering their core mission which is providing oversight and strategic support for management’s efforts to create long-term value.  The challenge is to strengthen the knowledge of boards and help directors build, maintain and refine a long-term mind-set.

Six Essential Steps to Take

1.     Identify what a director’s ‘fiduciary duty really is.  This entails placing  the company’s interest ahead of one’s own – a duty of loyalty), prudence (applying  proper care, skill and diligence to decisions) and help the company thrive for years into the future.  The board should time more time discussing potential new goods, services, markets and business models as well as what it takes to capture value-creation opportunities with big upsides over the long term.

2.     Select the right people – appoint directors who are independent thinking  and whose experience has specific application for the organisation.

3.     Spend quality time on strategy – this may involve more time on the role, devoting more time to understanding  and shaping strategy.   Board members may need to dedicate  more time on a mixture of field trips, the quality and depth of strategic conversations and the strategic engagement with the organisation

4.     Engage  with stakeholders  which involves understanding the stakeholders and their needs,  facilitating dialogues and engagement with them.  Stakeholders are not an optional extra and there should be channels for direct  feedback and awareness of stakeholder views.

5.     Ensure there is deft handling by board chairs or lead directors alongside CEOs.  There may be a need to shift the culture, behaviour and structure of the board.  Sometimes there is no pain without gain.

6.     Consider the significance of digital technologies (especially social media)   and the associated reputational and cyber security risks.  Social media policies should be discussed at board level and this relevant area should not be managed from outside the boardroom.

Craft the steps with into clear and specific goals and deadlines.   2015 is already looking like it is full of promise!!

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