Today's board directors are busy inside and outside the boardroom. They don't have time to waste on issues where they're not making progress or having an impact. There is a lot of pressure on today's boards to direct the company's affairs, develop sound policies, meet shareholder expectations and ensure the company's prosperity. With all eyes on the board, today's board directors need to be at the top of their game. By getting the right people on their boards and implementing the right digital tools, boards can work at their maximum potential. To make things easier, we've developed an expert board effectiveness checklist, which we have included at the close of this article for your convenience.
All board meetings should be effective. Planning for board meetings is essential for productive and effective meetings. There is no better way to ensure board meeting efficiency than to use board meeting management software. The software makes it possible to reduce meeting planning time from weeks to hours. Board administrators can add meeting materials to the system and update it in real time. Automatic alerts notify users of the latest updates immediately. Automation motivates board directors to review their board materials early and ensure that they come to meetings fully prepared.
Improving Board Effectiveness
Another area that shareholders and regulators have targeted for improvement is board composition. It's vital for boards to have the right talent in the boardroom. Shareholders and regulators are looking not only at what the board is doing, but at who is serving on the board.
The National Association of Corporate Directors (NACD) and Diligent have partnered to develop a tool to help streamline and inform the process for composing boards and selecting executives. The Nom Gov tool is a digital solution that gives nominating committees access to over 125,000 director and executive profiles. The tool ensures that boards are constructive, forward-thinking and inquisitive.
It's vital that board directors be clear on their responsibilities and have clear delineation from management's responsibilities to prevent situations in which boards attempt to micromanage their managers.
McKinsey & Company's 2018 Global Survey of Directors showed that boards struggle the most with board processes. The survey of over 1,100 board directors indicated that board self-evaluations were a particular area of difficulty. Since board self-evaluations are required for many companies, this is an area in which boards can easily demonstrate improvement.
This is another area where board directors can avail themselves of digital tools to help elevate and streamline their performance. Diligent's self-evaluation tool helps boards to identify their strengths, weaknesses and gaps in skills. Self-evaluations also help boards check on diversity, skills, competencies, motivation and board dynamics.
Diligent's software solution for board self-evaluations is an efficient alternative to cumbersome spreadsheets and off-the-shelf surveys, and it's more cost-effective than bringing in outside consultants. This software has been used successfully for corporate, nonprofit, healthcare and financial institutions across the globe. Users have the benefit of multiple types of user-tested questions, submission monitoring, visual graphics for results, custom reports and automatic reporting. Automated analyses are more efficient and accurate.
Diligent's software solutions help boards achieve compliance and a strong performance. The robust security of the platform ensures better communication and collaboration between the board and management.
Today's boards must be able to agree on acceptable formats to ensure that they're reporting all issues and statistics accurately and they need to be able to identify key performance drivers. Diligent's tools comprise the total enterprise governance solution whereby boards can fulfill these duties with accuracy and transparency.
Being an Effective Board Member
In addition to having the specific skills and abilities that the board appointed them for, board directors need to embody a servant-leadership mindset. All board directors must have high analytical skills and be capable of developing strategic challenges and opportunities in a constructive way.
Valuable board directors take 100% of the responsibility when things go wrong and they're willing to give 100% of the credit to the board as a whole when things are going well. Effective board members know how to delegate issues to the right people when it's appropriate and appoint key people to represent important areas. Effective board members have strong networks outside the boardroom, and they are willing to use those contacts for the best interests of the company as needed.
An effective board member is one who is knowledgeable about cybersecurity and demonstrates their commitment to cybersecurity practices by sharing information from the top down and modeling secure behavior. One way to demonstrate cyber awareness is by using Diligent software solutions, where security is a high priority. Diligent Corporation has built state-of-the-art security into its platform. All software solutions are fully integrated into the platform, which is audited, ISO-, TRUSTe- and FIPS-certified for top-of-the-line security.
Effective board members stay in the loop regarding the most innovative board management tools. They know which tools will benefit their board the most and how to use them effectively. Diligent platform users use the system for all their board communications and file-sharing. Diligent Corporation is an industry leader in the governance space, and they are primed and ready with board governance software solutions for today's corporate needs and those of the future.
Effective Boards Take a Modern Approach to Governance
Board directors don't necessarily need to be able to solve problems by themselves. What they need is the right information at the right time to inform the best decision-making. That's the definition of modern governance. Effective board directors use Gov Intel by Diligent to customize and catalog news outlets to track everything, including companies, competitors, topics and industries. The tool is the most efficient way to monitor corporate and industry news to identify market trends, sentiment scoring, risks and opportunities. Board directors will get the right news at the right time by tailoring the sources, volume, frequency and modes of consumption to maximize the benefits of the software.
Board Effectiveness Checklist
Review the following board effectiveness checklist to ensure that your board is covering all the necessary bases of a highly effective board.
- Implement Board Management Meeting Software by Diligent Corporation
- Skilled board chair encourages full participation, keeps discussions productive
- Online agenda that can be updated in real time
- Mandatory board attendance
- Getting the right board composition
- Objective board self-evaluations
- Use software solutions with top-of-the-line security that meets security standards for boards
- Use Nom Gov to compose the most effective board
- Stay strongly in the loop with industry and market intelligence with Gov Intel