How do you build an effective board? It depends on the stage of the company, as different board needs arise at different points in corporate growth, according to an expert panel convened in Boston on October 17 by the New England Chapter of the National Association of Corporate Directors.
Early-stage boards tend to be small, insiders only, and highly focused on getting the basic product or service correctly structured.
Boards of larger companies with greater internal resources are able to turn their attention to more mature subjects: risk evaluation, CEO succession, monitoring performance, and most importantly fixing corporate strategy.
There is thus a need for a dynamic board model, with membership updated over time, as companies mature. How do you achieve this transition? One method is through board self-assessment, leading to a candid evaluation of how well the board is functioning vis-à-vis company needs. Another method is through an independently director, or perhaps a CEO/Chair, having candid one on one conversations with individual directors about how they are functioning.
If a board is being changed to reflect the specific needs of a company as those needs evolve, how do you establish board cohesion? The panel noted that a careful interviewing process before onboarding a director can help focus on personality fit, and how well individuals will work within the group. One company generated a Handbook on how to onboard new directors, including designating a more senior director as a mentor. Others noted that joint education and orientation sessions for both old and new directors, together, can create the requisite bond. Retreats, social dinners prior to board meetings, and “unpacking” content from both retreats and regular board meetings so as to permit more personal interchange, also were mentioned as methods of building board cohesion.
[There will follow three more posts on separate subjects arising from discussions at the NACD meeting referenced in the above post.]