The business environment and stakeholder preferences shift in subtle to seismic ways. In such a dynamic environment, effective board governance is crucial to the long-term prosperity of a company. There isn’t one solution that will work for everyone but the most effective boards have proven methods to measure, drive and improve the effectiveness of their board.
These best practices include an explicit evaluation process and a culture of board development, and the use of digital tools to improve efficiency and transparency. These tools and techniques allow you to evaluate the effectiveness of the board in its role as trustee, fiduciary, and representative for the company. They also promote collaboration among directors.
Board members should commit their time and energy to the assessment and give honest feedback. Boards should be able to agree early on the goals they want to achieve for the assessment and then set aside time to discuss and agree on these objectives. Boards can also leverage the board portal to make it easier for directors to share ideas and information and monitor progress towards the goals.
Another crucial aspect to take into consideration is the structure and composition of a board. This includes the size of a board as well as the number of committees formed, as well as the frequently those committees meet. Be sure that the committees are equipped to handle their workload and that the focus of each is current and future value drivers for the company.
It is also essential that the chair has the capacity 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. In addition the chair should be open to constructive feedback about the way they lead.
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