This year, I had the pleasure of attending my fourth Edison Director College, and this time, had the opportunity to work with David Nevas to help prepare and chair the event. The morning session was led by Eleanor Bloxham, CEO of The Value Alliance, an independent consultant for Fortune 500 boards and PE-backed boards, who ran a working session focused on creating common goals in the board room.
Following are 6 key takeaways from our session with Eleanor:
1. Being a Board Member is a Job.
To set the stage for early success, a board needs to remind themselves that being a member is a job. This may sound like a pretty common understanding from the outside, but if a board member is not prepared to spend as little as a few hours a month, up to a few days a month, working with the company and helping it move in the right direction, then he/she is not doing his/her job. 2. Defining Roles and Goals is a Must.
Making sure the board is aligned can be done by defining each board member’s responsibility. It should be clearly understood that they have a job to do, and roles definition helps clarify each member's job for fellow board members and the CEO/exec team. Defining board goals is also important so that both the company, and other board members can hold each other accountable against those goals.
3. A Board Must Evolve.
Board member jobs (roles) and the members themselves should evolve as the company evolves. It’s important for the board to continuously ask themselves whether they have the right board members in place, just as they work to ensure the company has the right management in place to execute against goals.
4. Don’t Just Focus on Financials.
Don’t forget about the strategic topics, and sometimes, departmental ones. Reporting boards focus just on quarterly performance and financials; boards, who both see the forest from the trees, and are willing and able to dig in on other matters such as product, can be strategic weapons for a company.
One suggestion by the group was to make sure board members have interacted with the product by getting a demonstration and engaging with the product team about where they are going, rather than merely speaking with management. Other suggestions were to have board members get pitched by customers to explain what they liked, and disliked about the business.
5. Be Transparent.
When investor board members are around the table, it’s imperative for everyone to be transparent about their goals regarding the company. When multiple investor board members exist, this can be challenging as people may not want to “show their hand.” But at the end of the day, everyone should know the ultimate goal of each board member so the company and each board member’s goals are aligned and can be optimized.
6. Have a Lead Director.
Many times, a board has a chairman and CEO. Chairman or no chairman, boards need to have a lead director who is willing to be the point person, get their hands dirty, and work with the company to help elevate a board’s impact on a company. The lead director should not be one of the investors, rather an independent who can challenge the group and drive alignment.
As board members, we all know instinctively that having common goals in the board room better serves the company, but going from theory to practice seems to be a challenging task for many boards and companies.
Our discussion about how to create common goals in the boardroom is just one frank conversation that board members should have more frequently. The problem is, if you aren’t talking at a board level about creating these common goals, are you providing enough value to the company? The above points are merely some of the many great suggestions during our Director College. What would/could you be doing differently with your board?
Be sure to check out photos from the event on our Facebook page.