The component of board management effectiveness of the board assessment process focuses primarily on the board procedures for managing its agenda, meetings, and the distribution of a written reports. It is essential to ensure that every item on the agenda is accompanied by clear expectations, timelines and quantifiable outcomes.
Another crucial aspect to consider is the ability of the board to comprehend and respond quickly to risks and business challenges. Boards need to be flexible in their approach, whether it’s shareholder activism or cyber-security.
Finally, the ability of the board to inspire and support the CEO and senior management is essential in enabling them to perform their responsibilities. A thorough review of the board’s performance can help to re-establish specific roles and functions of the C-Suite and the board of director so that everyone works to achieve the same goal.
The board’s understanding of the business is broader than just what management says to them and includes their own research on supplier, customer and other key stakeholder behavior, trends and economic challenges and opportunities. Board members are also able to visit the websites and engage with management in a casual manner between boardmaps software meetings to gain firsthand information.
The board has an information management structure that is well-constructed and understood. It also provides the level of detail required to make informed decisions. This could include a list of board reports and notifications that clearly defines the issues that require board oversight (mission essential) and what doesn’t (management issues). A governance framework that outlines the board’s role in each of these areas could be helpful.