Shaking up the status quo: How new members can help boards out of a rut

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Boards of Directors make decisions that promote the best interests of shareholders, customers, suppliers, NGOs, employees, government agencies and all other stakeholders. They need to be well informed to do their jobs well. Seasoned members pride themselves on their knowledge and the established governance protocols. Having someone new join the group naturally creates a shift in dynamics.  Discussions often become more complex and perhaps even a bit uncomfortable at times. It can be frustrating to get things done because new members pose lots of unanswered questions as they accelerate up to speed. 

When you throw a global pandemic into the mix – one that’s causing economic turmoil and fundamentally changing how business is conducted – board work becomes even more complicated. Or does it? As many businesses start to resume and mandates evolve because of Covid-19, keeping all board members well informed becomes mission-critical. So really, it’s the same objective, but also a chance to shake up the status quo and supercharge Board effectiveness. 

Is adding a new board member an opportunity to fine-tune the approach to Governance, even at this time? Absolutely. 

Recognize this as a moment to experience some very productive shifts in perspective and meeting protocols. It may be the perfect time to master video conferencing, using a gallery view, so everyone can see all participants and learn a little bit about each other’s expressions and mannerisms. Remember, in a traditional meeting, you may only see the reactions of the person seated across the table from you. The benefits of having a visual on all of the people you are meeting with are numerous – from relationship building to being able to see gestures and emotions and listen to the speaker’s tone. You’ve got to be well prepared because you’re front and centre all the time. You can’t be reading ahead or multi-tasking.  It’s the perfect time to ensure everyone gets a refresher on a Board Member’s Duty of Loyalty, to always act in the best interest of the stakeholders. The same holds true with the Board’s Duty of Care, that is, to do what any reasonable person would do when presented with the same information. 

When board members have worked together for years, there’s a certain familiarity with the dialogue and decision making. Groupthink starts to emerge. Often the meeting structure, reports, agendas and committee participation remains unchanged even when the business has evolved significantly.

If unchecked, and not challenged, a board can be in danger of not acting in the best interests of its stakeholders.

To combat static thinking, new members should receive an extensive board orientation package. At a minimum, this should include background information about the company, its strategy, shareholders, suppliers, accounts receivable, contracts, and payables. They need to learn about any risks, issues and opportunities. It’s prudent to share critical personnel files and details about incentive plans to make sure they can develop a broad picture of the organization. They should also have face-to-face meetings (or in today’s circumstances, video calls) with senior leaders to get to know them outside the context of the broader board meeting.

That new board member comes with a wealth of experience and their own best practices that they’ve picked up from other boards they’ve served on. They will expect that the corporate secretary prepares detailed supporting materials for the meeting, including all of the options and recommendations from management to all board members, are that these are sent out at least five days in advance. If there are any last-minute changes, they have to be noted a minimum of 24-hours before the board meets. 

For all board members, this means reading all materials in advance, preparing some clarification questions and provoking thoughts on the alternatives both considered and rejected. The reason the package is circulated in advance is to ensure that board members can enhance the decision making of management.  

Everyone will also appreciate investments made in well-structured meetings so that they feel valued and respected for their time and contributions. All members will have had a chance to review where things are and be eager to dive into the discussion, clarifying assumptions and asking any questions that surfaced during their materials review. This is a chance to crystalize the Board’s understanding of the decisions at hand, and at the same time, revisit the quantity, quality and model for electronic delivery of the materials. Solicit feedback from new members about other board’s best practices and invite them to comment about how they see committee structures:  whether they are going to be sufficient to address the needs of the corporation.

In the end, it’s preparations and a revival of great Governance strategies that will help boards become more productive and successful and get them out of a rut. All members will have a chance to share their expertise more broadly, providing reliable guidance for the management team. Even if you don’t have a new member joining your board, it may be time to brush up on best practices and make your meeting times more valuable.