How to “Rightsize” Your Board

Performance is a matter of having the right people on a board, as well as the right number of people. Some boards are too big, bloated with an accumulation of members who, while respected, may no longer fulfill important governance responsibilities. In too many organizations, membership is a matter of privilege and prestige—based on who people know rather than what they know. Term limits are not enforced, leading to excess.

In other organizations, a board might be too thin. The membership roster might seem appropriate or typical, but is it enough to encompass the breadth of strategic priorities that a firm or organization has?

In other words, boards must be the right size for their charge. We recommend “right-sizing” as a regular, healthy activity that all boards should engage in. Right-sizing doesn’t have to mean a culling of the herd or complete restructuring of the board. In many cases, it can serve to validate a board’s current composition, enabling tweaks to an already high-performing body of individuals.

How is it done? Here are some basic elements of preparing for and executing a board rightsizing:

1. Assess member skills. The skill sets of board members may not align with the current and future strategic needs of the organization. Through skills assessment, the board can identify gaps and overlaps that may be inhibiting its effectiveness.

2. Push members outside their comfort zones. Develop skills and abilities of current board members through stretch assignments and serving on committees where they learn and grow. Before any reshuffling takes place, can current members fill strategic gaps and needs with support?

3. Play to strengths. Before considering any membership changes, make sure individual members are complementing each other. Form committees and task forces around members who can play off each other and learn from each other.

4. Determine which members do not align with the board’s needs and goals. This is the hard part. Each board will have members who no longer play an essential role in advising the company. Unless they play another important function—soliciting donations, for example—they may be holding the board back. Take seriously asking these members to retire or not renewing their contracts when they expire.

5. Set term limits and put structure around bylaws. The “seat for life” tradition on many boards is a hindrance. Bylaws need to specify term limits, nomination dates, and expected member contributions as a means of supporting a regular and healthy turnover in membership. With strong bylaws, boards can rightsize as an ongoing, systematic process that doesn’t disrupt its functioning.

6. Recruit regularly. Finding members who fit the organization’s needs is not a passive exercise. Ongoing, targeted recruiting of members is essential to fill gaps, especially given the competition in the marketplace for difference-making board talent.

7. Rightsize regularly. Reassess the board’s size and suitability for meeting the organization’s needs every few years, as needs and the landscape change. Term-limit expiration dates serve as good opportunities to do this.

Think of right-sizing as akin to stepping on the scale in the doctor’s office. If the number is too low or high, it is not time to panic. However, a correction may be in order.

 

Jim Gauss and Monica Burton :Jim Gauss is chairman of the Board Services practice at the executive search firm Witt/Kieffer. He has more than three decades of experience advising board members and CEOs on best practices in governance, leadership transition and succession planning. Monica Burton is a consultant for Witt/Kieffer, based in the firm’s New York office. She has led C-suite searches and has a particular interest in recruitment and succession planning for governing boards.