A corporate board can be populated with smart, experienced people and still fail to provide a growing company with what it needs.
The difference often comes down to how the board and management work together.
I have seen boards err in both directions. In an effort to be supportive of management, some boards become overly deferential, leading them to overlook red flags or hesitate to ask difficult questions. Others overstep their bounds, getting too closely involved in operational details, ultimately hampering management’s capacity to execute. Neither approach makes for a particularly effective board-management relationship.
Effective boards find the right balance. They stay engaged without trying to run the company, challenge management without being adversarial, and maintain focus on key issues or concerns that demand response and resolution.
Make Room for the Questions That Need to Be Asked
I have observed situations in which non-profit board members were very conscious (and rightfully so) that the staff was underfunded and working extremely hard. Trying to be supportive, however, led naturally to a habit of demanding less from staff and a reluctance to probe deeply into issues and to ask tough questions. Eventually, serious issues came to a head that the board should have reacted to sooner, had more attention been paid to red flags along the way.
Those experiences are instructive. Sometimes a board can be so cooperative that it may fail to meet its responsibilities.
Balancing a supportive stance with rigorous oversight can be challenging. A best practice is agreeing with management in advance on the KPIs that are core to the health of the enterprise and building the board report around them. Starting from a shared understanding of what data matters can facilitate candid and productive discussion when metrics do not meet expectations.
And, of course, board members must come to meetings prepared. Management has a responsibility to deliver meeting materials far enough in advance to allow time for directors to conduct a meaningful review, consider issues presented, and come ready with questions.
Advanced preparation should be coupled with an agenda and meeting schedule that leaves enough time for real discussion. Lengthy recitations of reports directors could have read beforehand are a waste of an opportunity for the board to add value on the issues that truly require the board’s attention.
Rather, meetings should be planned around the question: What do we really need to talk about?
Sometimes the answer will be apparent in the numbers. A shift in cash projections or customer retention, for example, may raise questions about what is changing in the business and how management is reacting. Other developments, such as leadership team turnover or delays in launching planned initiatives, may be symptoms of underlying issues.
Whatever the concern, directors must be willing to ask questions and challenge management’s thinking. This does not mean confronting people simply to give them a hard time. A board adds value and fulfills its responsibilities when it can probe an issue, test the thinking behind management’s response, and ensure the important questions are being addressed.
Create a Board Cadence That Keeps Issues Current
There is no one-size-fits-all board calendar. Quarterly meetings are common for governing boards, although the appropriate frequency depends on the organization and what is happening in the business.
The CEO and board chair should agree on the appropriate cadence to keep the board updated with information current enough to be useful. During periods of significant growth or change, more frequent interaction may be warranted.
The rhythm of the meeting process matters just as much.
Directors need materials far enough in advance to read them, think about them, and perhaps call the CEO or CFO with an initial question. During the meeting, the chair needs to stick to the schedule to preserve enough time for genuine discussion. After the meeting, management should follow up quickly and completely on information requests and commitments.
If I were going to add one habit to an organization’s board process tomorrow, I would start with executive sessions at the conclusion of every meeting.
At the conclusion of the planned agenda, there should be time set aside for an executive session with the board and CEO, without the staff present. Ideally, a second session should be held with board members only. This provides an invaluable opportunity for candid feedback regarding staff, the CEO, and the issues and ideas addressed during the board meeting, while it’s all still fresh in everyone’s mind.
Stay in Your Lane, on Both Sides of the Table
One of the most important conversations between a CEO and a board involves what each side expects from the other. Alignment on expectations is critical to a healthy relationship.
CEOs should have an appreciation for the board’s role, its mandate, and its limitations. The board has fiduciary and legal responsibilities for the oversight of the enterprise. A CEO who attempts to keep the board in the dark will quickly create conflict with board members. Conversely, a board is not in a position to run the company day-to-day, and a CEO who relies too heavily on board handholding will experience board member frustration.
The board likewise must stay in its lane, consistent with its responsibilities for governance and oversight. Directors should understand the company’s goals, align with management on strategy and measures of performance, and hold the CEO accountable for delivering against those expectations and agreed-upon metrics. The board cannot run the company, nor should it try.
The best approach is to align with the CEO on what needs to happen and then charge the CEO with determining how to make it happen and how success will be measured.
Turn the Conversation into Accountability
A board can have a productive strategic discussion and still accomplish very little if the dialogue ends with the meeting.
When a concern rises to the board level, the board’s first response should be to ask the management about how it plans to address it. That means coming back with a realistic, achievable action plan, accompanied by meaningful, relevant measures of attainment. For a significant initiative, making a KPI dashboard a standard feature of the board report will make the issue visible from one meeting to the next, affording directors continuing visibility into progress.
An important question to ask is who owns the solution. The board can identify the concern, ask questions, and establish what it needs to see to feel confident that the issue is being addressed. Management, however, remains responsible for charting out the solution and executing what needs to be done.
I think about it the same way I would if I asked someone on my team to draft an important letter. I can explain what the letter needs to accomplish and the points it needs to cover. But if I start dictating every sentence, I might as well write it myself. Reminding leaders to state the message in their own words leads to a better letter and allows them to retain ownership of the task.
The same principle applies in the boardroom. Accountability works best when management has clear ownership of the plan, and the board has enough visibility to know whether the commitments made are actually being carried out.
The result is oversight and accountability without micromanagement.
Favor Dialogue Over Data
If I had to leave a CEO and board chair with one broad principle, it would be to favor dialogue over data.
Of course, the board needs data. Directors need accurate information, relevant metrics, and a clear view of the business. But that information should set the stage for a substantive conversation.
You bring a group of experienced, intelligent people into a room because you want them to think together, to ask questions, challenge assumptions, share perspectives, and help management see what it might otherwise miss.
That requires candor from both sides. Management cannot attempt to curate every piece of information until there is nothing meaningful left to discuss, and directors cannot avoid difficult questions because they want the relationship to remain comfortable.
When participants are aligned on roles and on what data matters, constructive dialogue will follow. The board can do what it is there to do: provide thoughtful oversight and feedback while giving management the room to innovate and execute.
About David I. Buckman
David I. Buckman is an ELAB advisor specializing in legal, strategy, and organizational development, drawing on more than 35 years of experience as a leader, executive, and legal professional. He works with leaders on strategic planning, governance and compliance, leadership development, crisis management, and communications.
Prior to joining ELAB, David spent nearly 20 years as Chief Legal Officer of Allied Universal, where he oversaw global legal and regulatory affairs and participated in strategic planning and mission-critical initiatives. He also served on the Allied Universal board and brings extensive experience with industry and nonprofit boards.