Welcome to The Savvy Directorâą blog, a place to engage on board governance topics as you travel the path to being a savvy director.Â
If you're interested in upping your game at the board table, no matter the size of your board or the type of organization you serve, subscribe below to receive a weekly link right in your email inbox.
There are no HiPPOâs in the boardroom, are there? Yes, there are when HiPPO stands for âHighest Paid Personâs Opinion.â
The HiPPO effect is when the highest paid personâs opinion carries more weight than anybody elseâs in the room. Thatâs because we subconsciously endow highly-paid people with a degree of authority that they donât necessarily deserve. Itâs human nature to believe they are smarter, savvier, and more strategic than the rest of us.
In a boardroom context, the HiPPO is probably...
Joining a new board of directors is like getting on a bus â one thatâs already full of people and is well on its way to its destination.
The tricky part is that the bus isnât stationary. Even as you hop on, itâs already moving.
Whether itâs your first bus ride or youâre a veteran, youâve got to catch your breath, find your place, and settle in for the journey.
In the same way, whether youâre a first time director or youâve already served on a few boards, itâs normal to start a new board ro...
Â
When it comes to executive compensation, itâs best to be cautious about giving advice. Thereâs a great deal of variation across industry sectors and geography, a multitude of designs available, and many different factors to consider.
Yet the board of directors is ultimately responsible for making executive compensation decisions. Itâs an important responsibility because having the right plan is a key factor in driving organizational performance.
Given these stakes, how can savvy directors...
Most of the available advice about how to improve reports for the board of directors is about content from the senior management team â reminding us that, even though itâs easy to point the finger at management for voluminous reports that are painfully dense, the board itself is accountable to ensure it receives the information needed to fulfill its role. If you, as a director, arenât happy with the form, length, style, and content of your boardâs management reports, go ahead and raise the iss...
Organizations are becoming more and more dependent on third parties to provide the services they need to stay in business â from IT to accounting, from customer service to HR, and more. And the more we rely on third parties, the more important it is to evaluate and manage our exposure to associated risks.
The board of directors plays an important role by ensuring thereâs a focus on effective third-party risk management before problems arise from the increased risk exposure.
Â
Whether your board serves a non-profit that competes for funding or a business that competes for market share, having a sustainable competitive advantage continues to be the holy grail.
Your competitive advantage is what you do better than anyone else. If youâre lucky, you could have more than one such advantage. The âsustainableâ part of the phrase refers to the ability to continue doing those things better than anyone else over the long term.
Does the board of directors have a strategic ro...
Itâs happened to all of us. Youâre at a board meeting involved in a lively discussion. But when you take a moment to step back from the conversation, you realize that the topic is rather trivial. In fact, it doesnât deserve the time and energy that board members have been pouring into it.
Nevertheless, everyone has an opinion and insists on having their say. The discussion goes on and on, well past the time the relatively unimportant matter should have taken. It seems odd, because a more impo...
For me, reading and learning about artificial intelligence (AI) has been like drinking from a firehose. I could choose to ignore it and get a nice glass of water from the filtered jug in my fridge. But that wouldnât end well.
Instead, Iâve been learning that boards today arenât yet seeing AI as an important education topic for their meetings or board retreats. Thereâs some curiosity around ChatGPT, but otherwise little sense of urgency. In my view, thatâs a mistake.
Does it get your attenti...
Businesses naturally progress through different stages as they grow and mature. So do non-profit organizations. Their boards of directors need to change along with them, otherwise thereâll be a serious mismatch between what an organization needs from its board, and what the board can actually deliver.
As a board moves through these stages over time, it requires a changing set of attributes and competencies from its members. As a director, youâll be more engaged and more satisfied, and youâll ...
Every board of directors depends on a stream of reliable information to fulfill their oversight role. A whistleblower program is a tool for directors to access information that would otherwise not reach the boardroom.
Whistleblowers give the board a window into what is happening inside the organization. But for whistleblowing to work properly - so that both the whistleblower and the accused person are protected â the program must be handled with care. The board plays an important role in esta...
Stay connected with our weekly posts about what it takes to be a savvy board director