Boards’ lights, camera, action moment is here

I’m sure even the best of us have had moments where we’ve become a little staid and comfortable with accepted processes, a little fixed in our ways and supportive of the status quo.

In our world of governance, when boards reach the point where they lose the ability to see that things could be done differently, it’s time to resume the continuum that has defined the subject since it first came into vogue in the 1970s.

Initially, governance wasn’t taken seriously. When it subsequently morphed into a field of learning, people became interested in what good boards did. And, until recently, we’ve seen a strong divide between the role of the board and management enter the landscape.

Regular discourse has management complaining that the board is interfering in operational matters; the board wades in and accuses management of being defensive when asked questions.

As this scenario becomes increasingly rigid and inches towards a ‘never the twain shall meet’ situation, it is vital that the continuum moves into a new and more agreeable chapter – and it is heartening to know that one leading company out there is pushing the boundaries and achieving great results.

I’m talking about online entertainment giant and breaker of models, Netflix.

They’ve established that perhaps the principal reason for the divide is that it’s difficult for non-executive directors who attend board meetings once a month and other gatherings periodically to ever develop an understanding of the operation that comes close to that held by management.

But Netflix also appreciates that those on the board are smart people, with extraordinary skills that rather than being wasted, should be harnessed in other less formal ways.

If one director has a particular skill set and the executive team is getting together to discuss an issue connected with that skill set, the director is invited to join the brainstorming session.

Additionally, Netflix board members – not all, but on a rostered basis – attend the monthly staff meetings of the top seven executives; they also attend the quarterly meetings of the top 90 executives and find the time to sit in on the annual two-day gathering of the top 500 employees.

They watch, listen and become deeply educated.

Netflix’s innovation extends to board papers which are structured as 30-page online memos in narrative form. The memo, sent to members ahead of each meeting, not only includes links to supporting analysis but gives them access to all the data and information on the company’s internal shared systems.

It offers them the ability to pose questions, which management responds to, and add comments.

The result is real interaction in preparation for each board meeting – and significantly more efficient meetings. And with the technology around various board portals making this sort of dynamic interaction between board and management a whole lot easier than ever before, surely it’s time for…

Lights, Camera, Action!

Until next time,
Kate.

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