The boardroom is a location that thrives on trust and mutual respect. To work more effectively, board members should feel confident in their relationship with their fellow directors. However, PwC1 found that only 29% of C-suite executives rated their board’s overall performances as ‘good’ or ‘excellent’, whilst 89% felt one or more directors needed to be replaced. These two statistics are likely to be linked.
Board relations need to be strong to bring the best out of the collective. However, this is not without its challenges and requires strong leadership and a concerted effort to foster better connections between directors.
This article discusses the importance of improving board relations, the methods by which you can achieve this aim within your organisation and the obstacles that you might meet in the process.
Importance of effective board relations in organisations
When directors work together in harmony and with a shared purpose, they achieve more. Where there is a breakdown in the relationships, it can only reduce the effectiveness of the board as a whole.
The best decisions are made when all participants are active in the discussion, willing to listen to others’ points of view and challenge them in a constructive manner. When there is a breakdown in the relationships on the board, some members can hold back and others might not be open to hearing alternative opinions. What should be a collaborative effort becomes a competition to ‘win’ the debate by shouting loudest.
A harmonious board does not mean that everyone thinks the same, but rather that each member is willing to consider the range of ideas and concerns around the table. This diversity of thought is what drives better decision-making.
Given the role the board plays in setting the tone for the organisation’s culture and performance, having a sub-optimal board dynamic can be detrimental to the strategic future of the business.
Steps to strengthen board relations
1 Establish clear roles and responsibilities
When everyone on the board understands their specific areas of responsibility, it helps to create an understanding with regard to who takes the lead in which areas. It also provides purpose and focus for each director, allowing them to own their area of board work and not worry about others encroaching on their territory.
By overseeing the distribution of roles and the creation of a clear board structure, you create strong foundations on which to build a healthy and cohesive board. It ensures everyone knows what they are expected to deliver individually and as part of the collective.
It is a good practice to make it clear that it is necessary for directors to thoroughly prepare for and contribute to meetings, as well as to follow up effectively on the action points assigned. When all members follow through on their obligations, there is no room for resentment that could lead to a breakdown of relations.
2 Foster open communication
Staying quiet when there is an issue can allow it to negatively impact the way that directors work together. If directors feel unable to talk to their colleagues or senior leaders about their concerns, this can be detrimental to creating a harmonious and effective board.
Furthermore, McKinsey2 found that improved communication can increase productivity in teams by between 20 and 25%. Another report by Gartner3 suggests that only 38% of corporate boards have positive social dynamics. These statistics highlight the fact that your directors must be able to interact with each other in an open and honest manner, as well as being able to escalate concerns with the confidence that they will be heard and taken seriously.
3 Implement effective onboarding for new members
Having a new director get up to speed as soon as possible is important in terms of the work that they produce for the board, but it is also essential to fostering the right relationships with their fellow board members. By integrating them effectively, you help them develop bonds with their colleagues that will build the foundation for cohesive relationships.
In order to bring in new members effectively, consider the following elements of your onboarding process:
- Provide documentation about board policies and procedures, structure and information about current members
- Outline financial management practices
- Describe the decision-making process
- Train on use of board technology
- Provide a mentor
- Organise a social meeting for the board of directors
- Provide meeting notes, minutes and previous agendas
- Set up a meeting with the CEO
These actions will help create a welcoming and constructive environment for the new director.
4 Provide board training and development regularly
By helping your directors stay up to date with developments in corporate governance, you reduce the risk that they become set in their ways and less able to accept new and innovative ideas from colleagues.
Continuous development provides an opportunity for directors to work together to grow their competencies and broaden their outlook on all aspects of their roles. This improvement culture can benefit a board’s interpersonal relationships and improve collective decision-making.
5 Encourage diversity and inclusivity
Board diversity refers to not only someone’s background and characteristics but also to their experience and competencies. It is essential for a high-functioning board to expand its horizons and find new ways to tackle challenges.
By auditing the diversity of the board and identifying gaps, you can recruit members who will bring their unique insights and contribute to improved board performance. A board where members are celebrated for the contributions they make in providing new angles on solving issues is one where directors respect each other and hear each other out.
Extol the benefits of creating a diverse group and acknowledge how this range of expertise feeds into an improved decision-making process that will ultimately benefit the business.
6 Utilise effective meeting management
Your directors’ time is precious and you want what time they do have for board work to be spent in the most productive way possible. This requires a streamlining of the meeting process to eradicate wasted time and to make the most of the talent you have at hand.
Board members can become frustrated when they have to bring others up to speed on issues, reports and topics for debate. By ensuring that the agenda and board pack are sent out in good time, you allow for better preparation that means all members enter the board meeting fully versed in what they will discuss and what they want to achieve.
Simply by approving the previous meeting’s minutes before the next meeting, you save time in the boardroom for important business, rather than discussions about the accuracy of the meeting record.
A board portal that allows for document sharing, voting, the monitoring of action points and more streamlines the admin side of the board meeting. It helps discussions take place in an unobtrusive manner that keeps the momentum going for directors.
7 Establish performance metrics and evaluation processes
Holding your directors accountable is important for ensuring they focus on engaging with their work more effectively. If everyone is working at the top of their game, directors are more able to see that their colleagues are pulling their weight and the board is moving in the correct direction.
Track metrics for your directors, board and committees such as:
- Meeting attendance
- Meeting quality
- Individual participation
- Risk management
- Turnover rate
- Stakeholder feedback
- Peer ratings for effectiveness
Establish those metrics that most matter to your board and implement regular evaluations to ensure it is continually improving. This encourages accountability and ethical behaviour in the boardroom which can set the stage for a more harmonious environment.
Challenges faced in board relations
| Challenge | Explanation |
| Communication gaps | If there is anything that prevents the free flow of information within the board, it can negatively affect relations. Directors should be able to collaborate and discuss concerns seamlessly, even when not in the same room. |
| Differing priorities | When board members’ priorities do not align, it can lead to a breakdown in the relationships of the board of directors. Ensure that you seek out board members who understand and buy into the organisation’s mission. |
| Ineffective decision-making | Without clear governance on the board, it can be difficult to gain consensus and arrive at decisions that board members can back as a unit. Implement training to help directors understand varying inputs and reach beneficial agreements. |
| Unclear roles | If the roles and responsibilities of the board are unclear, it is left to each director to decide on what is an appropriate contribution to the board’s work. This can create an uneven distribution of responsibility that affects the relations in the board. |
FAQ
How can conflicts between the board and management be effectively resolved?
Here are some suggestions for conflict resolution solutions within a board:
- Establish clear communication channels and protocols.
- Use mediation or neutral facilitation to address conflicts.
- Reinforce roles and boundaries for both management and the board.
- Encourage transparent and open discussion of issues.
What strategies can be used to keep board members engaged?
Engagement can be fostered through meaningful involvement in strategic discussions, recognition of contributions and regular updates on organisational progress and challenges. Celebrate each others’ successes and foster open communication and collaboration in the meeting room and remotely, too.
How does board evaluation contribute to better governance?
Regular board evaluation helps identify areas for improvement, ensures alignment with organisational goals and maintains high standards of board performance. It adds an element of accountability into the work of the board and ensures all directors are held to their decisions and actions.
Conclusion
Board relations are important to the effectiveness of the board and rely on the foundations being laid to encourage better interaction and a sense of accountability. When there is a situation in which all directors understand each other and are focused on a common goal, the collective can make better decisions and ensure that actions are taken to turn them into reality.
The article is written by iBabs.
iBabs’ board portal features a host of tools to improve communication and accountability, such as shared documents in the cloud, the ability to monitor action points and engagement metrics, such as document open rates and meeting attendance. By using this platform, your board can take that next step forward and improve the efficiency and effectiveness of its work. Request a demo for your organisation today.
References:
PwC1 : https://www.pwc.com/us/en/services/governance-insights-center/library/board-effectiveness-and-performance-improvement.html
McKinsey2 : https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/the-social-economy
Gartner3 : https://www.gartner.com/en/newsroom/press-releases/2023-11-16-gartner-general-counsel-survey-finds-only-38-percent-of-company-boards-of-directors-have-high-levels0of-director-quality-and-positive-social-dunamics
