There's no question that there's a lot more pressure and scrutinization on board directors than there's ever been before especially in order to be an effective board member. The challenges that corporate boards are currently facing are the exact things that make it such an exciting time to serve on a board of directors. There has never been a more opportune time than the present for board directors to shine and rise to the top of their game.
Part of being a board member is preparing for board materials, showing up for meetings and partaking in discussions. If board members don't do those things, it will certainly be noticed. However, there are other things that board members can, and should, do to make their mark on the board and the rest of the company. The most impactful things that board members can do have less to do with their actions and more to do with who they are and how they do things. By placing their full focus on the company ' and not on themselves ' board members will be effective.
Being an Effective Board Member: Focusing on the Results
It's certainly an honor to be asked to serve on a corporate board. While you may have the talent and the ability to serve effectively, it's important to check your ego at the door and focus on helping the company get results.
Harry Truman was the 33rd President of the United States. He spoke candidly about the importance of where everyone should place their focus. He said, 'It is amazing what you can accomplish if you do not care who gets the credit.' Those words couldn't be truer for board directors.
Board directors need to have a servant-leadership mindset. They don't get a board seat so they will be liked or accepted. They shouldn't serve solely for the money. Their main focus has to be on building equity in the company and on serving the best interests of the shareholders.
In addition to any specific skills the board selected them for, board directors need to have high analytical skills and be capable of framing strategic challenges and opportunities in a constructive way.
A particular area where board directors can get themselves in the weeds is being so quick to offer their own solutions to problems. This sometimes happens when they believe they actually have the answer or if they've previously served in an executive position. A better approach is to bring forth the types of powerful questions that will get the rest of the board doing a deep dive of thinking so that they can form the right plans overall.
True Character Gets Revealed in the Boardroom
With so many factors and moving pieces around them, it's easy for board directors to point at factors other than themselves when things go wrong. Effective board directors are willing to take 100% responsibility for the board and the company regardless of the issues that drove circumstances. This requires board directors to shift their mindset to one of internal control. Effective board directors take full responsibility for things that go wrong, and give 100% credibility for the positive and exciting things that happen, to the full board.
Because of the complexity and challenges that board directors face, the true character of board members is quickly revealed. Board directors need to be able to separate what they want to do from what they should do. There's a fine line for those who formerly served in management positions in which they used their skills to help the board see different angles without appearing to be a 'know-it-all.' Each board member is responsible for their actions and needs to understand that their actions will be subject to external principles and values.
Effective Board Members Delegate Wisely
It's not wise or prudent to expect all board directors to be experts at all things. Best practices for board composition encourage diversity so that the board gains the advantage of having many perspectives. Executives and managers are responsible for daily operations and board directors should refrain from micromanaging them. A good approach is to appoint key people to represent important areas and let them do what they do best. Thoughtful delegation leads to execution, progress and success.
Effective Board Directors Spend Time Working Outside the Boardroom
One of the qualities that nominating and governance committees should consider is how interested prospective board directors are in business and other issues related to the corporate marketplace. The most valued board directors understand the 'business' of business at a very high level. They are adept at constructively challenging executives, setting strategies and hold the executives accountable for their performance.
Highly effective board directors work toward developing strong relationships with executives and the CEO. Moreover, they work toward actively connecting executives to new relationships within their network inside and outside the boardroom. In working with executives, effective board directors are constructive, inquisitive and to the point.
Effective Board Directors Have the Ability to Envision, Engage and Execute
Highly sought-after board directors not only have and maintain a vision for the company's potential, they're able to share their vision infectiously. Effective board directors are excellent team players who are naturally skilled at developing strategies that maximize shareholder value and who also have high levels of impact and influence.
Engagement means helping the team work together as one unit. Rather than continually asking 'why,' board directors are more effective when they ask open-ended questions. They're active listeners who try to understand how others think and ask follow-up questions. They exercise self-control and don't fire off one question after another but give themselves and others time to reflect on discussions. Engagement refers to asking enough questions to fully vet an issue so that the board can come to a reasonable consensus.
Effective Board Directors Maximize the Potential of their Board Management Software System
It's fair to say that those who wonder how to be an effective board director should be tapping into all the mental, social and commonsense potential that a person has. In addition, it's reasonable to expect that board directors will use all the digital tools that they have at their disposal to the maximum extent possible. A board management software system and the entire suite of tools offered by Diligent Corporation should be a platform where board directors spend most of their time. Diligent Boards offers a secure platform for working on agendas and meetings. Practically any other tool that board directors need to utilize they will find in the offerings of Governance Cloud. 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.