Understanding Boardroom Procedures
Many first-time directors have found that boardrooms have a completely unique language and that understanding boardroom procedures comes with a learning curve. Most (but not all) “motions” have to have a “second.” Directors answer “aye” or “yea” instead of just saying “yes, I agree.” Board chairs call for a vote and ask if there are any “abstentions.” For the uninitiated, boardroom procedures can seem perplexing, although they do follow a set of rules.
Most governing bodies, including boards of directors, follow Robert’s Rules of Order to ensure consistency, fairness, and effective board meetings. Robert’s Rules of Order is a set of norms and practices developed in 1876 by Henry Martyn Robert, a US Army brigadier general to establish parliamentary procedures for how meetings should be run. While the original intention of these parliamentary procedures was not for board of directors meetings, Henry Robert eventually wrote a book, Robert’s Rules of Order, that adapted the rules and practices of Congress to the needs of non-legislative groups and was eventually adopted as the national standard for how board meetings should be conducted.
Effective Board Meetings for Good Governance
Over time, the use of Robert’s Rules of Order has become a hallmark of how boards run effective board meetings, which are a prerequisite for good governance. The book itself outlines meeting procedures, requirements and guidelines so that meeting participants don’t spend valuable and rare meeting time debating how the meeting should be run and what rules should be followed. The book also illustrates the role of the board chair and how he should adhere to certain principles to allow for fair and objective meetings to reach the best possible outcome within the designated guidelines for decision-making.
Beyond merely adhering to Robert’s Rules, effective boardroom procedures include a thoughtful agenda, clear and concise minutes, and engagement by all directors. The most effective board meetings combine sound boardroom procedures with strong leadership from the board chair, who leads the meeting and ensures the board stays focused on meeting the objectives set out in the meeting agenda.
Modern Governance Board Procedures
The fact that many boards follow Robert’s Rules does not mean that governance has not evolved. With the advent of digital tools designed specifically to support board work, boardroom procedures are now becoming more streamlined, and in some cases automated. From using secure board portals to package and deliver board meeting materials, to online voting and evaluations, to leveraging digital networks for board nominations, boardroom procedures are evolving.
Modern governance involves the combination of the right tools, updated boardroom procedures, and directors following best practices to ensure good governance. For example, new AI-fueled analytical tools can help companies determine their board effectiveness “score,” and identify any skill gaps that exist in the current composition of the board. This can help the company identify and mitigate potential risk of having too little diversity of perspectives on the board. Algorithms and deep learning tools can also help boards monitor their company’s “reputation score” – spotting potential vulnerabilities before they become shareholder actions, lawsuits, negative press, or something worse. Boards that leverage modernized boardroom procedures have a competitive advantage over their peers.
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