What factors contribute to a successful, effective board? Is size important, or is culture, composition and access to information paramount? Our Executive Director Search and Recruitment, Jean Fagan, provides her perspective.
Governance structures are rapidly changing and shifting the functions of power and leadership. In particular, health system structures and the huge growth in the number and size of not-for-profit organisations continue to drive the shift. Not-for-profits, which have in the past largely been discounted in the economic debate, are now serious business critical to social and economic development.
Business and community leaders, consumers and executives are stepping into board roles and in a large number of instances, are unprepared to deal with the hurdles of understanding the relationship between their governance role and management, and the challenge of dealing with having the right information to drive the organisation’s success.
Board composition and culture is without doubt a major dimension that contributes to board effectiveness. This is one time that size doesn’t really matter! Other key dimensions of board effectiveness are:
- – Genuine engagement and commitment driven by passion to deliver value to shareholders/consumers
- – Director availability
- – Board processes
- – Information Systems which foster director knowledge and understanding of the organisation from the inside and outside
It’s this latter dimension, board information, which will really focus decision making, stimulate participation, support strategy and, potentially, contribute to encouraging board member engagement.
It’s the responsibility of the CEO, board chair and board members to make decisions about what information is needed by the board, how often and in what format.
An example of an Information System Framework might be:
- Board Meeting Agenda (documents sent 2 weeks prior to meeting)
- Financials including forecast, summary analysis
- CEO Report
- Market intelligence that includes opportunities and risks
- After the meeting
- Minutes and next meeting date
- An informal, monthly email memo from the CEO with key current activities, achievements and needs
- Committee reports which include recommendations and an analysis ( 2 weeks before board meeting)
- Director visits (site/technology/partner)
- Surveys – staff, consumers
- Regularly when appropriate:
- Significant published articles about the organisation
- Updated handbook material
- Advanced copies of publications, brochures, marketing material
Access to information is a critical element of board effectiveness (Maitlus 2004), but getting the balance right is essential as overload can divert members from the important issues.