Here is Mike Hudson’s best guidance on maximising the effectiveness of governance reviews based on over 100 reviews Compass Partnership has conducted:
We have learned that the single most important factor is the genuine engagement of chairs and chief executives. In evaluations that add greatest value they encourage everyone to be completely open and honest about strengths and weaknesses. They also commit to rigorously implementing changes that are agreed.
In turn, board members and senior executives need to be willing to have frank conversations about how they can work together even more effectively.
If these three conditions are not met, substantive change is unlikely to happen. When they are met, most boards can raise their game substantially.
Set up of the review
A clear plan for the review needs to be proposed, discussed and agreed by the board and senior leadership team. It should include time to discuss the review outside the constraints of regular board meetings. Any anxieties or cynicism should be flushed out and resolved at this stage.
Analysis of the findings
It is easy for the findings from questionnaires and interviews to point to a series of small improvements needed to meet the requirements of the relevant Governance Code. There are often many minor adjustments that can be made to the board’s structure, processes and meetings. The key to making transformative improvements is to use the data gathered to generate new insights into what will make the biggest difference to board effectiveness.
These move beyond perennial recommendations such as better board papers and less cluttered agendas, and pinpoint what needs to change to enable these difficult things to be achieved.
Getting to the fundamentals
Beyond that, our experience is that biggest gains often come from open discussion and agreement on:
- the role of the board and the different assumptions that board members and senior executives may be making about the way it should work to maximise the value of the talent around the table
- how the board should work as a team, rather than a group of individuals
- how the board can work in closer partnership with senior executives and at the same time hold them robustly to account
- how to delegate more authority to committees and ensure appropriate reporting, so that there is more board time to address the strategic issues that only the board can resolve
- how to improve preparation and running of board meetings, in particular pinpointing what is required from the board for each agenda item and what needs to be done before meetings start to facilitate high level discussion.
With these fundamental matters addressed, trust and confidence that members have in each other and in their executives will create the foundations for meetings that add the greatest value and are more enjoyable too.
Mike is author of Managing without Profit published by DSC