Welcome to The Savvy Director™ blog, a place to engage on board governance topics as you travel the path to being a savvy director.
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Stakeholders are persons or groups with an interest in an organization who can affect or be affected by its decisions and activities. Given what’s happening in our world, it should be no surprise that the idea that organizations should be accountable to a broad base of stakeholders has gained traction, pushing the topic of stakeholder engagement to the top of many board agendas.
After all, our organizations don’t exist in isolation. They are influenced by the same forces of change that we’re all dealing with – forces like COVID-19, climate change, truth and reconciliation, social justice, activism, and so on.
Increasingly, those forces of change have uncovered evidence of an imbalance of power between corporations and their stakeholders. So now would be a great time for Savvy Directors to dive into the topic of stakeholder engagement.
The term stakeholder engagement refers to the work that organizations undertake to identify,...
In a time of rapid change, it’s vital for boards to ensure they have a vibrant team with the right mix of knowledge and skills to keep moving the organization forward.
But many boards find they don’t have the right processes in place to keep their membership fresh and relevant. And boards can find that their quest for renewal is blocked by a shortage of vacant seats, as sometimes directors stay on the board for a very long time.
When is long board tenure too long? What can boards do to encourage healthy director turnover? And what is the individual director’s obligation when nearing their best before date?
Board composition has become an area of focus in both the for-profit and non-profit sectors, with particular emphasis on diversity, tenure, overboarding, and director skills. In the publicly-traded arena, stakeholders, investors and rating agencies are paying a lot of attention to director turnover, and with good reason.
We all believe that groups make better decisions than individuals. There’s power in numbers, isn’t there? Otherwise, a board of directors might just as well consist of one person.
But is it true? Do groups really make better decisions?
How do groups go about making decisions, anyway? More importantly, how should they be making decisions to improve the odds of achieving the best outcome?
And what is the boardroom reality when it comes to decision-making? Do boards really make decisions? Or has management baked the cake?
Group decisions often – but not always - produce better outcomes than individuals. They work best in situations where time is not a factor. The group method is not ideal when there’s an urgent need for a quick decision. A group’s advantages include:
When we join a board, whether or not we have prior experience as a director, we all hope to ‘hit the ground running.'
We want to make a difference sooner rather than later.
And our boards share that wish. They want to set up their new directors for success – feeling comfortable and able to make a contribution early on. That’s why many boards hold an orientation session – a few hours devoted to helping new directors get on their feet.
I set out to find out what a new director can do to ensure they hit the ground running. I found a lot of advice out there for boards. But for individual directors who want to ensure they hit the ground running? Not so much.
Let’s explore what boards can do, then consider how an individual director can leverage that information.
A single orientation session doesn’t really cut it these days – if it ever did. The board may feel that its part is complete, but...
I often close my email messages with the words ‘Stay Curious.’
For me, it’s more than just a closing line like ‘Sincerely’ or ‘Yours truly.’ I mean it as a reminder to the reader – and to myself for that matter – to intentionally focus on always bringing a lively state of curiosity to the board table.
I firmly believe that curiosity is one of the attributes that separates a ho-hum board director from a Savvy Director.
And I’m not alone in thinking that.
“The best board members are inherently curious. ... They never settle for highlights or default to conventional methods. They don’t just analyze the information they’re given, but they pick up on the body language and interactions of the executive team. They’re obsessed with discovering the why.” - Brian Stafford, CEO of Diligent. Modern Governance 2.5: What Does it Mean to Be a Curious Board Director?
An emphasis on the value of curiosity is...
I’m sure you’ve seen it happen. The board decides to hold an in camera session – or as it’s known in the US, an executive session - clearing the boardroom of all staﬀ.
Outside the closed door, staﬀ perceive it as a signal that something ominous is about to happen. They start to speculate about what’s going on. Is the CEO in trouble? Has something scandalous occurred? Is the company threatened?
Inside the boardroom, the questions are less earth-shaking. How should we proceed? Do we need minutes? If so, who will record them? And what will we do with them?
And then what happens?
“Time and again I hear that [in camera sessions] become useless bitch sessions about staff and nothing actionable or productive comes from them. Worse still, the CEO sits outside, assumes that it is a bitch session and wonders what nasty things are being said that he/she is not being given the opportunity to defend or address.” – Joan Garry, author of Joan...
The value you bring to the boardroom is what matters.
You’re in the boardroom for a reason. It's not enough to simply show up. Putting your skills and attributes to work will enable you to make a positive impact on your board.
Knowing how and where you can add value helps you be the most effective director you can be. It gives you the confidence to engage actively with your peers around the board table (or on the computer screen).
“The board is a special group of people. People who are professional, people who have multiple identities, people who are busy, and people who do not spend that much time together.” - Stanislav Shekshnia, INSEAD Senior Affiliate Professor on Entrepreneurship and Family Enterprise.
The individual value you bring to the boardroom is found at the intersection of your knowledge, influence and leadership.
During my meeting PREP, I find it really helps to focus in a mindful way on how I might add value to the work of the board. Thinking...
Does kindness have a place in the boardroom?
Lately I’ve read a few interesting articles about the value of being kind vs. being nice. It got me thinking about how this distinction applies to a board of directors.
The Savvy Director understands that being effective requires more than just knowledge of the esoteric rules of board governance. It requires understanding people - how they think, behave and interact with each other. In fact, one of The Six Key Habits of The Savvy Director is ‘Collaborate with People.’ That implies treating others with respect, compassion and empathy.
So is the Savvy Director kind? Or nice? Maybe both? Or maybe neither?
First of all, let’s explore the difference between being nice and being kind.
In a nutshell, kindness is about helping others, and niceness is about pleasing others. Sometimes you can be kind to someone even though you aren’t being nice. And you can be nice to someone while being unkind.
How can directors possibly know what is going on in the organizations they serve? After all, while management spends all their time immersed in operations and strategy, board members spend a comparatively small amount of time on their board duties and seldom step outside the boardroom.
That makes for a huge information gap.
As a board director, you’re pretty much completely dependent on management reports and presentations to best inform the discussion that’s needed to fulfill your responsibilities.
And yet, in my experience, those management reports are often a source of deep dissatisfaction for board members. Many organizations rate them as weak or poor! What gives?
What should the Savvy Director expect – or demand – from management reports? And what can be done to improve them?
The flow of information from management to the board enables directors to fulfill their duties as board members. Whether you call...
There are days when it’s just not obvious what the subject of the next weekly Savvy Director blog should be. So, we happily welcome reader suggestions.
A couple of weeks ago, Jim sent an email with a link to an article from The Globe and Mail, ‘Introverts, time to add some extrovert skills into your repertoire.’ The gist of the article is that, to be effective, introvert leaders sometimes need to act like extroverts.
Jim’s comment was, “Interesting article. You may wish to write about introverts/extroverts at the board level on your blog.”
He was right. This is an interesting topic to explore. Which director is savvier – the introvert or the extrovert?
As it turns out, the ambivert has an advantage over both.
Our personality traits play a huge part in all facets of our lives, and the boardroom is no exception. One of the most important of these traits is that of introversion/extroversion....