The business environment and stakeholder preferences change in subtle and dramatic ways. In a dynamic board environment, effective governance is crucial for the long-term prosperity of a business. There isn’t a single solution that is universally applicable, but the most successful boards use proven approaches to gauge, guide and improve the effectiveness of their board.
These best practices include a clearly defined process for evaluating as well as a culture of board development, as well as digital tools for efficiency and transparency. These tools and techniques will help to assess the effectiveness of the board in its function as a fiduciary and trustee for the company, while also encouraging collaboration between all directors.
Board members should commit their time and energy to the assessment and give honest feedback. Boards should define their goals and discuss them in the beginning. Boards can use a board portal for directors to share ideas and information, and track progress towards the objectives.
A board’s structure and composition is yet another important area to take into consideration. This includes the size of the board and the number of committees that are created, and how frequently those committees meet. It is important to ensure that committees are sized to manage their workload and that the focus of each one is current and future value drivers for the company.
It is also essential that the chair is able to facilitate productive discussions and decision-making processes. This includes the chair’s communication and relationship-building skills with the board, other directors, and management. The chair should also be able to accept constructive criticism of his or their leadership.