Supervisory Boards
3 x 3 ways to create more effective boards
The Team
An effective team is more than the sum of the experience of its members. A dysfunctional team can be so much less and conversely a high performing team has found a way to multiply its member’s abilities. How:
1. Selection Criteria: Soft Skills & Diversity
Most boards now look to a certain degree for soft skills or EQ to complement the technical expertise, even if mostly as a secondary aspect. Even then the criteria are often not well defined. “Integrity” may mean something different for the interviewer. Collaboration skills, how do you test for this and collaboration with whom? Decisiveness, how do you define this skill.
An easy way to create more specificity is to define the traits you want in form of behaviors. And behaviors can be interviewed and tested for.
A growing aspect for selecting the right person to a board are the team composition. There are various analysis, surveys and psychometrics, from MBTI to Hogan, that don’t only give insight into the individual, but can help to find complementary attitudes for the team. However even simple common sense and discussion on which mindsets and skills are needed to complement the team are a good step.
2. Team Building: A team is a group of individuals working TOGETHER and towards a common goal
Even if you select the perfect profile with complementing skills to the team, there is no guarantee, that the people will work well together. Many boards have found, that they are heavily driven by one or two strong (alpha) members, while the rest of the team finds themselves silenced. Not only does this mean, the team doesn’t benefit from the other’s voices and experience, it can create dangerous group think and tunnel vision. Spending time with each other to learn the strengths, blind spots and preferred way of working, can help mitigate many misunderstandings and is a good first step to create a trusted environment. That is vital for good decision taking.
3. Evaluation: What you measure, you will get. So be aware of the criteria, consistent in applying them and ask for an independent view
Boards have started with evaluating their own performance. Some by self-evaluation, some give each other feedback, some even by independent sources. However as with any performance evaluation, the depth and honesty of the feedback is often insufficient (safety, trust), the criteria for evaluation too ambiguous and the system can be gamed. Therefore, creating meaningful and effective evaluation criteria coupled with a strong and honest process, is key for continuously improving the quality of the board.
The Meetings
Effective meetings stem from a mix of the soft skills of the team members (incl. their maturity level as a team) and of simple but important hygiene factors. Here are some:
1. Agenda: Keep it concise, keep it important and keep it interactive
In most boards the agenda is filled to the seams. There are continuous struggles to shorten the agenda or the length of the material to prepare for it and somehow it never gets less.
Keeping the agenda topics to strategic ones, automating or at least improving the process around the operative topics, like reviewing and discussing the KPIs (maybe only discussing on exception basis) will significantly help with the quality of the session.
And importantly, making time for at least one working session will improve not only the quality of the decisions – after all, why do you have a board, when all the decision have been made before the session – but will improve teamwork and accountability.
2. Preparation: Ensure high quality of information and that everyone is prepared
Sessions, where only half of the participants have read the prepared material are unfortunately only too common. One reason is certainly that the amount of information to pre-read is growing proportionally with fear of the board. Overloading with information can have two reasons: 1. Fear of being reprimanded or 2. Hiding specific information, so the decision can be manipulated or at least influenced.
3. Follow-up: Create a timely, concise summary and have a tight process to ensure accountability
Creating a quick summary of the session is vital, as everyone needs to receive the overview, when it’s fresh in their minds. Creating a clear and specific view of who is responsible for what and by which date has become standard practice. But holding people to those dates and deliveries is a bit more difficult. The board should discuss this aspect among each other, decide, how to deal with delays and the communication thereof and practice, what they agreed consistently. A feedback mechanism for everyone to quickly bring up issues or lack of adherence to the agreed rules, should be considered as well.
Decision Taking
1. How you take decisions is important for the quality of the decision and for the effectiveness of the team
In many boards the question of how decisions are taken has never been a topic of discussion. Often a call for hands suffices. However, in many boards there is a “sunflower bias at play. Members follow the chairman or another strong alpha player. This has a severe impact on the quality of the decision and on team motivation. Having a transparent discussion on how decisions will be taken is a good start. Questions like:
Have we discussed all pros and cons?
Have we heard everyone’s concern and honest opinion?
Can everyone stand behind the decision?
In case of strong opposing opinions, how do we resolve this?
Should all decisions follow the same process?
You can easily put such a discussion on your next agenda. However, if you feel, that there is not enough openness yet or a “false harmony”, it can pay investing more time and possibly an independent moderated to come to a good solution.
2. How do you ensure the decision making process works and lasts?
It is one thing to decide on a good solution, it is harder to change the behaviour and stick with it. One intervention is certainly the above-mentioned feedback mechanism, i.e. when anyone sees deviation from the agreement that person speaks up or raises awareness immediately. Another intervention is to reaffirm the commitment to the decision making process at the start of each session. Or to discuss, which agenda point needs which process. Such a gentle nudge can really make a difference.
3. How do you hold the members accountable?
After all this consideration to create the best possible decisions in a board, now comes the proof: how will the decision be put into practice? Some decisions are clear and easy and can be acted upon immediately. But how about a decision around risk appetite or around values? We know Tone from the Top is really important. One way of ensuring mutual accountability is to assign beyond the session certain communication responsibilities to each member around the topics. Speaking publicly about e.g. the purpose of a company, treating the customer fairly, about which behaviours are not acceptable within the organisation, this communication is a powerful way to ensure accountability. People are much less likely to deviate from a path, when they have committed publicly and repeatedly.
Another powerful way to foster accountability is to measure it in the regular evaluation and to solicit regular feedback.
To conclude:
There are many ways to improve board effectiveness. It is actually not much different from any other team building with a big disadvantage stemming from the fact, that boards have less time of working together. Simply putting focus on good team selection and team work will make quite a difference.