What are the hallmarks of effective boards? Dr Sabine Dembkowski, Managing Partner of Better Boards and Associated Partner at A.T. Kearney, finds out
Research about what makes boards effective is hard to find. To date, there are only a few academic studies available. What’s more, these studies have not yet found their way into the practice of conducting board audits and reviews.
From this research, it’s becoming clear there are seven hallmarks of great boards. Board members can benefit by understanding the hallmarks and incorporating them in their practices in the boardroom.
1: The right composition of know-how and behaviours
Diversity of people breeds diversity of thought – this is essential for long-term board success. However, we found that the current focus on gender cuts the conversation short. The issue is far more than gender!
It’s crucial to understand how different areas of expertise, preferred group roles, and personality styles fit together and complement each other.
Hallmark 2: Utilising the strengths of members for effective boards
It is vital that individual members of a board understand their personal strengths and areas of expertise. Boards will also perform better if each member has a keen understanding of how their strengths are perceived by their colleagues as well as the collective strengths of the group. Effective boards help individual members and the collective to understand their unique strengths and how they can be leveraged to implement and execute strategy and ensure lasting value.
Hallmark 3: Clarity about roles and responsibilities
Ill-defined roles and grey areas of responsibility are the norms rather than the exception on today´s boards. The hallmark of an effective board is to have absolute clarity and transparency of roles and responsibilities.
Hallmark 4: Share a vision
Effective boards have a clear and common vision that provides orientation and guidance. Most boards would state at the outset that they are of a shared vision. More often than not I find the devil is in the detail and behind the facade there’s less alignment around the vision than the chairman and some board members would like to believe.
Hallmark 5: Ability to resolve conflict between board and management
Effective executive boards and their members understand how to resolve conflicts between the board and the next management level. Clarity about who on the board has good conflict management skills, and agreement of the issues that he/she should take ownership of, can help to resolve issues.
Hallmark 6: Solid structure and organisation
The organisation of the executive board’s work depends fundamentally on the Company Secretary and the interplay between chairman and CEO. Effective boards understand how to organise and structure their work.
Hallmark 7: Regular reviews and reflections
Regular time-out where board members can connect, leaving daily work behind them and reflecting on how they have worked together, are critical for success.
The seven hallmarks of effective boards are a good starting point combining the art with the science of effective boards. If they are properly applied, a chairman can gain great insights into how they can better orchestrate the board, while CEOs, executives and NEDs can gain insights into how to increase their level of impact, become more effective, and advance their board career.
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Dr Sabine Dembkowski is a member of the IoD