The component of board management effectiveness of the board assessment process concentrates on the board’s procedures for managing its agenda, meetings, and distribution of its written reports. It is essential to ensure that there clearly defined responsibilities and timelines, as well as measurable results for every item on the agenda.
Another critical aspect is the board’s ability understand and respond quickly to risks and business challenges. Boards must be flexible in their approach, no matter if it’s shareholder activism or cyber security.
In addition, the capacity of the board to support and inspire the CEO and senior management team is vital in enabling them to perform their day to job responsibilities. A thorough review of the board’s performance can assist in reestablishing specific roles and objectives of the C-Suite, and the board of director in order to ensure that everyone works to achieve the same goal.
The Board members’ knowledge of the company extends beyond what they hear from the management. It also includes their own research into trends in economic headwinds, customer, supplier and other stakeholder behavior. Board members are also able to visit the websites and communicate with management in a casual fashion during meetings to obtain firsthand information.
The board has an information management system that is well-developed, understood and offers the level of detail required to make informed decisions. This could include a list of board reporting and notices that clearly define what issues require board oversight (mission critical) and what matters do not (management issues). A governance framework that outlines the role of the board in each of these areas would be useful.