The Savvy Director Blog

“There’s increased pressure from stakeholders to be more transparent and accountable on ESG p...

Have you noticed that even a board made up of individual creative thinkers can prefer the status quo over change? If you’ve noticed this tendency, what you’re seeing is status quo bias – just another cognitive bias that affects our decision-making.

You know the saying, “If it ain’t broke, don’t fix it.” In other words, if things are working, we’re content to keep them that way. Simply put, status quo bias negatively affects our ability to make decisions – our ingrained preference for stabilit...

Robert’s Rules of Order? I’m not a big fan of Robert’s Rules. Who is this guy Robert anyway? Who made him king?

Okay, you’re right, my tongue is planted firmly in cheek. Boards do need to have a way of conducting their meetings and making group decisions. Robert’s Rules provide that framework.

That said, an overly strict adherence to the parliamentary procedures outlined in Robert’s Rules of Order can really be a buzzkill at board meetings. I’ve seen great discussions get derailed by uncerta...

If you’re a regular reader of The Savvy Director blog, then you know how much emphasis DirectorPrep places on the value of questions. Questions are directly related to a board’s ability to learn and understand, to think things through and make good decisions. In many ways, a board’s value lies in how well the directors question management, advisors, and each other.

As a director, asking questions helps you fulfill your fiduciary duty by satisfying yourself about what’s in your organization’s ...

It’s important for an organization to have clear goals. Goals are where the organization wants to end up, but it needs a strategy to get there. If the goal is the destination, then its strategy is the travel plan.

When faced with a fork in the road, a travel plan answers the question Which road should we take? And it answers many other questions too, such as Which routes will we avoid? What vehicle will we use? How fast will we travel? Who will navigate? Who will be along for the ride? And ho...

Have you ever served on a board with a director you’d consider ideal? Someone you can’t wait to have in the boardroom, to engage in conversation that’s forward thinking, inspiring, and infused with values and goals aligned with the organization you both serve?

If you haven’t experienced that yet, I sincerely hope you do at some point, because there’s nothing like it. No matter your colleague’s background, they come prepared - ready to participate in the board discussion. Maybe not for every t...

The question posed above by my finance professor in business school may be one of the most impactful lessons of my university education. Not sure why, except maybe to suggest that his question really hit home.

The question was pretty much a side comment to the discussion that was underway at the time and I’m not sure it resonated with others in my MBA class. But it did resonate for me. I was not even into boards yet, so, it wasn’t about that. Nonetheless it’s a powerful question I’ve brought ...

There are no HiPPO’s in the boardroom, are there? Yes, there are when HiPPO stands for “Highest Paid Person’s Opinion.”

The HiPPO effect is when the highest paid person’s opinion carries more weight than anybody else’s in the room. That’s because we subconsciously endow highly-paid people with a degree of authority that they don’t necessarily deserve. It’s 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 – one that’s already full of people and is well on its way to its destination.

The tricky part is that the bus isn’t stationary. Even as you hop on, it’s already moving.

Whether it’s your first bus ride or you’re a veteran, you’ve got to catch your breath, find your place, and settle in for the journey.

In the same way, whether you’re a first time director or you’ve already served on a few boards, it’s normal to start a new board ro...

When it comes to executive compensation, it’s best to be cautious about giving advice. There’s 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. It’s an important responsibility because having the right plan is a key factor in driving organizational performance.

Given these stakes, how can savvy directors...