Let’s get started on our Top 10 steps to being an effective director by tackling the first of these which, quite logically, is knowing what our role is and understanding what we’re there to do.
There are two components to this, the first one is knowing what we as individuals are to do and the second comprehending our role as part of the collective, as a cog in the greater wheel that is the board team.
The key to success, like many things, can be found in the detail – in other words, in the quality of the director role description provided.
A detailed and clear position description invariably leads to a smooth running, constructive and effective board; a loose and ambiguous brief routinely heightens the chances of it being a flawed and stuttering structure that seldom, if ever, operates at an optimal level.
Perhaps the most important requirement of a board member, both singularly and collectively, is to understand the role of the board versus that of management – and to appreciate that you’re the governance guys; management the operational folk…and never the twain shall meet!
As an individual, you’re expected to, among other things:
Use your abilities and experience fully, including being well prepared for board and committee meetings;
Be able to articulate the organisation’s strategy and participate fully and frankly in board discussions;
Know the organisation’s products, services, operations and market sectors and have a working knowledge of the accounts;
Know executives and other key staff and acquire adequate information for effective decision-making;
Respect confidentiality and, at all times, be an effective ambassador;
Maintain an excellent attendance record at board meetings; and
Work constructively as part of the board team and ensure that the interests of the organisation are forever paramount.
Which brings me to some of the central roles of the board as a collective…
Key among these is, of course, representing the interests of shareholders or members in the governance of the organisation.
For this to happen, the board must take responsibility for appointing and rewarding – or removing – the CEO and reviewing and approving their performance. Furthermore, it must review and approve management’s proposed strategy, along with the budget and other performance goals and, where necessary, take corrective action.
Its many and varied roles also include:
Approving and fostering the corporate culture;
Establishing that policies on key issues – including exposure to various risks – are in place and compliant;
Approving major decisions and, where appropriate, making recommendations to shareholders or members;
Establishing committee structures to assist in the effective operations of the board, one of which is an independent audit committee to appoint auditors, oversee the audit process and review reports;
Regularly reviewing and assessing its own performance; and
Monitoring the management of operations and affairs of the organisation.
Now that you know your role, chances are the good times will roll – for you, the board and the organisation.
Until next time,