There’s no better place to learn about developing a board of directors than from chairmen and board members themselves. There are certain expectations for board members, as well as the expectation that each board will prepare its members to handle their respective responsibilities.
We recently interviewed the longtime CEO of an energy company. He began by saying that he appreciates all of his directors. To him, the best ones have a firm understanding of the industry, and an understanding of the issues being discussed. They support ethical decisions, and give their time and talent selflessly.
Thanks to that interview, we’ve put together a list of 5 characteristics that separate good directors from great directors.
1) Committed to the organization, through consistent engagement and involvement
An individual who commits to joining a board of directors is pledging to actively pursue ideas and solutions that can benefit the organization. While board activities typically happen after work hours, it’s important for directors to set aside enough time to give board matters their full attention.
2) Actively participates in board meetings
Active preparation at the board meeting requires preparation, confidence, and a good working relationship with fellow board members. If any of those three things are missing, a board member won’t be able to fully contribute during a meeting.
Preparation means having assigned tasks completed (or a request for more time or resources to accomplish a given task). It also requires having a general understanding of where the board stands and how the member’s role informs the board’s progress.
Confidence comes from confidence in one’s own abilities, and it also connects back to preparation. If a member shows up to the meeting ready to deliver, having used their given talents to produce great work, their contribution to the board will be felt and recognized.
A good working relationship is tougher to nail down, but possibly the most important aspect of working on a board and contributing to meetings. If a director does not believe that a fellow board member is willing to listen or open to their contributions, they’ll defer and not bring any contributions forward.
This relationship must evolve over time. It involves individuals on the board, as well as deliberate planning by board administrators. There should be opportunities for each board member to get to know one another outside of the boardroom, and to find common ground and common values that can translate to working relationships and compromise.
3) Has open and honest communication with management and other directors
For a board of directors making important decisions, the stakes can be high. The boardroom requires a collaborative environment where members feel confident about sharing information. The boardroom should also serve as a space where opinions can be aired honestly (and with supporting facts).
This communication may be structured (as in, bylaws or other organized channels where grievances or opinions are shared), or more interpersonal and conversational. It’s up to each board to decide how best to relay information, and through what means.
4) Protects confidential discussions and uses the proper channels for those conversations
Information shared in boardrooms directly affects the short-term and long-term future of an organization. Therefore, confidentiality ranks among one of the most important qualities a board member needs.
Like the previous point, boards must have communication channels built into their structure, either explicitly or implicitly. Realistically, explicit directions for handling confidential information may be a wiser choice.
If a board regularly uses third-party services to manage important documents, those services must be vetted. Additionally, individual members must have security protections built into their document access. You can see what kinds of security protocols Directorpoint has in place at the bottom of this page.
5) Understands strategic time management and operates with a sense of urgency
A full boardroom represents a gathering of talent and potential. Simply put, the limit to that potential is time. Directors must recognize that time is valuable, and time management will affect the amount of work or planning that can be accomplished in a given meeting.
Even outside of the boardroom, committee or other independent work must be built into a person’s lifestyle and other responsibilities. But maintaining a sense of urgency when working on board tasks at home can push those tasks or projects forward, and make sure that they are completed by the time the next board meeting comes around.
A big thanks to our energy CEO’s candor and willingness to contribute to this article! We will be leveraging connections with our experienced client board members to produce other valuable insights.
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