The business environment and stakeholder preferences shift in subtle ways to massive ones. In this dynamic board environment, effective governance is crucial for the long-term viability of a company. There isn’t a universal solution, the most successful boards always employ proven methods to measure, drive and improve the effectiveness of their board.
These best practices include a clearly defined evaluation procedure, a board development culture and the use of digital tools to increase efficiency and transparency. These tools and techniques are able to help to evaluate the effectiveness of the board’s role as trustee and fiduciary for the company, while promoting collaboration among all directors.
Board members must dedicate their time and energy to the assessment and provide honest feedback. Boards must agree in the beginning on the objectives of the assessment and allocate time to discuss and agree on these objectives. Boards can also make use of a board portal to allow directors to share ideas and information and keep track of progress towards their goals.
Another aspect to be considered is the structure and composition of a board. This includes the size of a board as well as the number of committees formed, as well as the often they meet. Be sure that the committees are equipped to handle their workload and that the primary focus of each remains on the historical and emerging long-term value drivers for the business.
It is also essential that the chair has the ability to facilitate productive discussions and decision-making processes. This includes the chair’s communication and relationship-building skills with the board, other directors, and helpful resources management. In addition the chair must be open to constructive criticism about the way they lead.