What is meant by board effectiveness?
The Board of Directors (BoD) is usually responsible for validating the company's strategy and "monitoring" its execution. It is most effective when it acts as a support for strategy rather than as a controlling body. But how can you make your board more effective?
In order to achieve this, it is important to ensure that the substantive issues are addressed and not just to validate the company's indicators.
The effectiveness of the AC can be measured by its ability to fulfil its tasks.
As a guardian of the decisions taken by the shareholders, to what extent is it able to protect their interests?
In terms of corporate strategy, how far can it intervene in the event of a deterioration in performance?
Does it have the capacity to properly define the profile of the leaders needed for the firm?
Is it able to participate in the creation and development of specific knowledge?
In terms of its composition, a board is said to be more effective when the management and control functions are not performed by the same person. It is also better if it is small in size. In addition, it is recommended that it includes independent directors and specialised operating committees.
The effectiveness of the Board of Directors can also be defined as the degree of satisfaction achieved in fulfillingfulfilment its missions. It is then understood in terms of its ability to accomplish its various missions (control, strategy, services and advice).
What are the levers to increase the effectiveness of the Board?
The effectiveness of the AC rests on three pillars:
Clarification of one's role as a CA, personal effectiveness and collective effectiveness.
This can be summarised by the following questions:
- Are the right topics being addressed?
- Do we have the right people around the table?
- And how efficient is the Board of Directors?
Governance will not be a real growth tool for the company if any of these points are lacking.
1. The role of the Board of Directors
The role of the board may vary according to its ownership, management and the company's situation (especially financial).
The question of "are we dealing with the right issues" is addressed in the chapter on collective effectiveness.
2. Personal effectiveness
Whatever the Board of Directors, being asked to become a director of a company is always a sign of recognition and "prestige".
However, when one accepts a directorship, one commits oneself to working for the company, without counting one's time.
The efficiency of each director is therefore important for the Board, the company and for oneself, in order to limit the time-consuming aspect.
His skills (strategic vision, financial, legal or digital expertise, knowledge of the business sector), experience and availability are key.
In addition, there are essential qualities such as independence of mind, integrity, loyalty, curiosity and a sense of responsibility.
What's more, a certain amount of leadership is a must, along with a sense of solidarity and team spirit.
In addition, training of administrators once they are recruited is absolutely necessary in order to get the best out of them.
Whether in terms of business, the sector or the company's market challenges, a certain level of knowledge is essential, without necessarily becoming a specialist.
A programme of meetings with other directors and key members of management is recommended. It is also advisable to consider working sessions with experts on specific technical issues.
It is normally the responsibility of the Chairperson of the Board to ensure this knowledge and understanding.
There are a number of reasons why it may be advisable to call on the services of an executive coach at the beginning of a mandate.
Why use an executive Coach ?
An individualcoaching reinforces the ability to assert one's legitimacy and interpersonal skills. It helps develop the art of questioning, particularly the ability to formulate the right questions. It also helps to maximize the impact of public speaking.
A coach professional helps to clarify the diverse interests of the various stakeholders. Through individual coaching, while respecting professional ethics, he can sharpen the art of convincing and the ability to influence.
Of course, the choice of coach is important. It's even more important to choose a coach certified trainer who is also a trainer on these topics.
Feedback at Board meetings helps to maximise the potential of the new director.
3. Collective effectiveness
The board of directors and the executive committee (Codir or Comex) are the two essential bodies for collegiality checks and balances.
The executive committee is composed of the company's directors and managers. It is advisable that the board includes independent external directors with shareholder and possibly employee representatives.
However, bringing together competent and willing people in the board does not guarantee its proper functioning. Indeed, multiple biases may hinder their interactions.
Their good understanding is a guarantee for the smooth running of the company, their disagreement is a source of dysfunction and inefficiency.
Therefore, it is important to create an enabling and orderly environment for all participants to work together effectively.
The establishment of rules of procedure for the Board is part of this. It provides a framework. It is also a tool for recruiting a new director, as it defines a common working frame of reference.
The rules of procedure must address the functioning of the AC in detail, in order to lay the foundations for effective operation.
This should include the number of meetings in the year and how the directors participate. Confidentiality should be included, as well as any special roles of individual directors.
Six meetings per year seems to be a minimum. One of the Council's annual meetings should also ideally be devoted to its self-evaluation.
It should be remembered that the discussion time should be long enough to deal with the important issues of the company. It is impossible to hold meetings for only two hours without damaging the effectiveness of the board. Four hours are generally recommended to be able to deal in depth with strategic issues and to avoid having the board make decisions that have not been sufficiently worked out.
The benefits of coaching on the board of directors
A collectivecoaching or team facilitation greatly helps to create this favorable and methodical environment.
A coach management team well-versed in this exercise can help boost the Board's efficiency exponentially.
For optimum performance, several coaching processes can be envisaged depending on requirements.
With its systemic approach, the coaching team meeting prior to Board meetings can greatly strengthen cohesion within the Board. This consolidates a position of strength in relation to the Executive Committee.
A solution-oriented master coach enables you to prioritize the key points to be discussed with your management team.
It ensures that all directors express their views and that everyone is listened to.
In the event of differences of opinion, he or she guides towards a consensus or, failing that, towards a decision taken by a majority.
When there's a problem to be solved, a coach professional uses the collective intelligence and contributions of everyone involved to fertilize generative collaboration. His or her expertise often enables co-constructed solutions to emerge that no-one else had thought of.
By making people take a step back, it strengthens their self-confidence and improves their stress management.
Coaching professional board member
It is also possible to call on the services of a coach business specialist in systemics to directly facilitate board meetings.
In addition to the above, coach helps to reduce tension and prevent conflict.
He/she can support the Chairperson of the Board of Directors (PCA) in managing the time of the meeting.
It also assists the BCP in ensuring that all agenda items are addressed within the time allowed.
In particular, a review of the current situation, with highlights and decisions to be made, presented by management. In general, one of the topics identified as being of strategic importance to the company is also discussed.
Finally, personalised support can be envisaged for the particular needs of one of the directors (see § Personal effectiveness).
For further information, please contact Fabienne Revillard
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