The business environment and stakeholder preferences change in subtle and dramatic ways. In an environment that is constantly changing, good governance is essential for the long-term success of a business. While there isn’t a one-size-fits-all solution, the most successful boards are able to use proven strategies to determine, monitor and improve the performance of their boards.
These best practices involve a clearly defined evaluation procedure, a board development culture and the use of digital tools to improve efficiency and transparency. These tools and techniques allow you to assess the effectiveness of the board in its function as trustee, fiduciary and representative for the company. They also encourage collaboration among directors.
Conducting an assessment requires board members to give their time and provide candid feedback. Boards should outline their goals and discuss them prior to the start of the process. Boards can also leverage the board portal to make it easier for directors to share ideas and information and monitor progress towards the goals.
Another aspect to be considered is the structure and composition of the board. This includes the size of a board as well as the number of committees established, along with how often these committees meet. Make sure that the committees are the right size to manage their workload, and that they remain focused on the long-term value drivers of your company.
It is also crucial that the chair has the ability to facilitate productive discussions and decision-making processes. This includes the chair’s communication and relationship-building skills with the board, other directors, and management. In addition the chair should be open to constructive criticism about his or her leadership style.
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