If you were to break down the time spent in your board meetings, what percentage would consist of information that goes to the board (paperwork, reports, filings, presentations, etc.), versus information coming from the board (strategy discussion, suggestions, questions, etc.)? If we leave out basic administration, approvals, and other boilerplate, probably 75% of information is flowing toward the directors. Insight from the board doesn’t lend itself to such preplanning (think of it — your board book is all stuff that’s going to directors), and is maybe 25% of your time, at best. Ask yourself what could be done to tip the info balance back in the other direction. Designated discussion time on the agenda? Fewer presentations? Roundtable input? More use of consent agendas?
Speaking of board time breakdowns, here’s another exercise to try. At your next board meeting, keep an informal tab of how much meeting time is tied up with backward-looking issues (financial approvals, last quarter’s results, reporting on this or that initiative, etc.) versus forward-looking items (strategy, coming issues, succession planning). Most boards spend much more time looking over their shoulders than looking ahead, where they can add the most value (if you have a current CEO sitting on your board, does it make the best use of his time to have him reviewing SEC filings?) However, this suggestion is more flexible than the one above. Boards should be reviewing how well this or that project they approved came out as a useful learning and improvement tool.
More boardwork is handled at the committee level today, but are you really using this trend as a better governance tool? Committees are the ideal bodies for technical, compliance, and box-ticking stuff. Smart, active audit, compensation, governance, and other committees should handle the great majority of compliance matters, and deliver neatly-wrapped reports and recommendations to the full board for approval. This gives that full board more time for discussion on big topics. If your board spends more than a few minutes picking apart a committee’s work, either the committee is underperforming, or the board is too tangled in minutiae — fix one or the other (or both).
How does your board meeting agenda come together? Agreed, most of the line items are boilerplate, with the approvals noted above making up most of the bullet points. But again, these should be quick “aye” votes, with actual agenda time taken up by board input and value adding. Leave blank space on the preliminary agenda, and circulate to board members, asking for items they want to cover. Susan Shultz, chair of the board practice at Baker Gilmore (and one of the savviest people when it comes to board operations), today sees “more inclusion of directors in setting the agenda. Traditionally, the CEO did it, and then the board chair took on more of the work, but now the whole board is weighing in.”
You expect your directors to review material before meetings, and contribute at their board and committee sessions. But are you tapping their skills the other 90-odd percent of their lives? What if, a week before the board meeting, the CEO dedicated a couple of hours to calling each outside director to give a quick run-through of major items in the board package, and to ask about issues on the director’s minds? Or if you were to assign each member “homework” before meetings, like researching a topic of value to company governance and developing a short report, meeting with staffers, visiting company facilities, etc.? Among the “let’s talk” items at your next board meeting, schedule discussion on how much non-meeting time members should be expected to invest.
Read: www.boardroom insider.com