WHY NOT ASPIRE TO MORE?

💡 EVALUATE YOUR BOARD THROUGH THE 7 KEY CHARACTERISTICS OF A HIGH-IMPACT BOARD

(Originally published on January 23, 2024, in the Smart BoardRoom Strategies monthly publication, which addresses the challenges that a board of directors faces in a high uncertainty context. If you are a board member, if you aspire to be part of one, or have a managerial role related to the board, this publication is for you. ✅ Click here to subscribe.)

🎯"Success is a science; if you have the conditions, you get the result."- Oscar Wilde.

 Every company is unique in its culture, challenges, stage of development, and organizational structure. Despite these differences, most companies benefit significantly from having a good Board of Directors or advisory board. 🤔But what exactly defines a good board of directors?

 Certain observable characteristics predict the effectiveness of a board, i.e., its ability to prepare the company for current and future challenges and be a catalyst for improving results. 

However, the reality is that many board members feel frustrated, with a sense of inefficiency and lacking effective tools to transform the dynamics of their board:

✔️Long and unproductive meetings focused on repetitive and unfruitful financial analyses.

✔️More focus on risks than on adding value.

✔️Lack of clear direction and strategy to guide proper governance.

✔️Individuals who monopolize time and attention. Lack of diversity and experience. 

✔️Divergent interests, internal conflicts, and lack of alignment with management.

✔️Distrust, communication problems, and inefficient decision-making.

 It is true that there are companies with good economic results that do not have a board of directors, or have an ineffective and irrelevant board. But does this mean that the board of directors is irrelevant to the company's future?

Not at all. The fact that the company performs well and achieves good results despite the board does not invalidate the importance of having a good board. It simply indicates the importance of redesigning the existing board in terms of its composition, leadership, processes, and dynamics. It is very likely that such a company is not fully exploiting its maximum potential. Remember that past successes do not guarantee future successes.

🎯"What got you here won't get you there."- Marshall Goldsmith

Similarly, many other boards of directors are true assets to the company. They directly and positively impact the company's strategy, culture, performance, and results. These boards manifest distinctive characteristics such as leadership and strategic focus, diversity and teamwork, a commitment to learning, and continuous improvement of processes and dynamics.

Therefore, the first step in guiding improvement is to clearly understand the characteristics that make a board of directors effective and efficient.

🎯"Success is not only achieved by special qualities. It is, above all, a work of perseverance, method, and organization." - Jean Pierre Sergent.

There are 7 observable characteristics: 

1️⃣The first essential characteristic is Board Leadership, which must guide the company towards its purpose and values. These should be the central axis of decisions at all levels, thus fostering a solid culture by promoting sustainable development and mitigating risks.

2️⃣Secondly, a Board of Directors must be fundamentally Strategic, maintaining a long-term vision and a clearly understood overall strategy within the organization. This allows the company to stay focused and not deviate from its main objectives. It maintains a systemic vision and integrates sustainability strategy, innovation, and other initiatives around the overall Strategy.

3️⃣Third, it is vital that the Board functions as a High-Performance Team. This element, often underestimated, is essential but not easy to see, let alone achieve. Its relevance in terms of engagement, trust, decision-making, and, therefore, board performance is immense. In times of disruption, success does not reside in individual leaders but in teams whose contribution surpasses the sum of their parts.

 4️⃣The fourth key characteristic is an effective Architecture, which requires diversity in a broad sense and independence both in its composition and in the distribution of functions and responsibilities among the various roles and committees of the board.

5️⃣High-performance teams focus on productive dynamics and relationships, ensuring that teamwork processes are effective and efficient. This is the fifth key characteristic.

6️⃣For all of this to work, the sixth characteristic is essential, namely, the time that board members dedicate to their roles. This dedication has increased in recent years and is crucial for board members to add value, lead with purpose and strategy, and make agile and informed decisions.

7️⃣Finally, the seventh characteristic. A High-Impact Board focuses on Continuous Training and adopts a forward-looking approach (forward-looking Board). It anticipates risks and opportunities and stays abreast of emerging trends that could impact the business.

 Therefore, high-performance boards become so by adopting a continuous improvement approach. They are always thinking of ways to be even better. That's what makes them so good.

 To assess the effectiveness of your board, I invite you to a simple reflection. Respond with a 'YES' or 'NO' to the following key questions. If you answer negatively to 3 or more questions, it could be said that your board has opportunities for improvement:

 ✅ Does the board define the company's purpose, vision, and values, actively leading by placing them at the center of daily decisions and actions?

 ✅ Does the board maintain a long-term vision and a clear global strategy, ensuring regular review and that it is understood and deployed throughout the organization?

✅ Does the Board act with a Systemic Vision by integrating Strategy, Governance, Innovation, and Sustainability?

✅ Does the board function effectively as a team, with productive meetings and decisions made through open and constructive debate?

✅ Does the board maintain a diverse and independent composition, with an appropriate distribution of roles and responsibilities, and regularly evaluates its structure and effectiveness?

✅ Does the board promote productive dynamics and relationships while improving processes for effective governance and agile decision-making?

✅ Do board members show commitment and preparation for meetings, actively seek additional information and training, and maintain constant and effective interaction with each other and with other executives or stakeholders?

✅ Does the board focus on continuous training and development of its members, staying informed about emerging trends and their impact on the business to anticipate risks and opportunities?

📝In conclusion, high-impact boards don't happen by chance or by selecting a group of excellent professionals; instead, they result from the conscious adoption of effective practices. These seven observable characteristics provide a clear framework for evaluating and enhancing the effectiveness of your board. By affirmatively addressing these key questions, you can ensure that your board not only operates efficiently but also contributes to the success and sustainability of your organization.

➡️➡️Are you ready to maximize the impact of your board of directors?

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