How to Assess & Improve Your Board’s Performance (Part 2 – A Board That Pulls in the Same Direction)Wednesday, July 23rd, 2014
In the second part of my discussion about the performing Board I want to discuss the activities of dealing with initial change.
Earlier this month I published the first part of this discussion which identified how boards can make decision that causes minimal disruption and encourages a culture that encourages and motivates the whole organisation.
It’s important that the Board is a mixture of complimentary behaviours, management styles and finally expertise. A diverse team held together by agreed values is the most effective one to have.
One where honest debate is encouraged and programmes and actions collectively agreed and then implemented. Most importantly this Board must have the ability to think strategically and be agile enough to make reasoned tactical decisions.
It’s probably a utopian view, which rarely happens all of the time, but we have all at some time or another been working within a team that is constantly moving forward and everyone is pulling together.
Constructing A Board That Pulls In The Same Direction
Putting a Board that can work in this way together requires a methodical approach. An assessment of the Board both in Executive and Non-Executive functions should be undertaken to avoid an ad-hoc approach that may have to be repeated at another date with all of the problems that that entails.
Perhaps the first thing to recognise is that not all of the current incumbents will be the right people for the future. It’s important not to personalise this as nearly all people who may not be right for one team can be the ideal fit with another.
That’s why it’s important when the Business Leaders have recognised this, that those no longer part of the company’s future are helped with structured programmes such as outplacement to get them on the correct career path. So many businesses forget this or reluctantly agree as part of a settlement. It’s actually a sound investment as it protects the reputation of the business and may even create business opportunities at a later date.
Easing The Changes Into The Boardroom
One problem that often occurs is that more than one person on the executive team needs to be replaced. Many Chairmen and NEDs take the “easy” option of doing this in a sequential manner saying “so and so can leave now but we need to wait six months before we can make any other changes so as not to disrupt the business”.
Unsurprisingly this usually doesn’t help things at all as the whole executive team remains unsettled knowing that further changes are inevitably in the pipeline. Strategic initiatives are put on hold and of course underperforming executives remain in situ. A radical solution would be being honest and up front with executives and engage with them in the process. Rather than suddenly exiting them from the business, work in a “grown up” way for them to work out a programmed notice period to help with continuity and give them time and help to find their next position or career choice. Not only is there less risk with this option it also is seen as more humane and respectful and reduces the “collateral damage” caused to other employees and customers.
By exiting executives over a long time period there’s also a great opportunity to get a “handover” to the new executive and phase the outgoing executives commitment out over a period of time so as not to leave a continuity gap. In my next article I will discuss how to get the right fit and build a team dynamic that creates a performing Board.
photo credit: JasonParis cc
David Seall is well known to many businesses across London and the South East as an Independent Director and Chartered Engineer specialising in the Manufacturing and Engineering sectors. David worked for many years in the Aerospace and Defence industry and was Chief Executive of the Engineering Employers Federation for London and the South East (EEF South) for over 10 years, working with hundreds of companies.