What makes for an effective Board meeting?

Board meetings in SME’s can take a variety of guises, from the formal monthly meeting held around a table in the office to the more informal, ad hoc  “when we have something to discuss” meeting over lunch in the pub.

Either way, Board meetings are an essential and integral part of the Corporate Governance that all Directors have a responsibility to conduct and participate in.

So what makes for an effective Board meeting?

The Financial Reporting Council (FRC) of the accounting profession says the Boards role is:

  • To provide entrepreneurial leadership of the company within a framework of prudent and effective controls which enables risk to be assessed and managed.
  • Develop and promote its collective vision of the Company’s purpose, culture and values.
  • Give strategic input and to monitor the work of it’s executives.
  • Not become purely an operational meeting – an extension of the senior management team meeting.
  • Vision, strategy and direction should be an important outcome.

How is this best achieved?

Through regular structured meetings, which allow participative, focused deliberations that are minuted and then closely monitored for implementation.

  • Having a regular time and date.

For example, Board meetings will be held on the 2nd Tuesday on alternate months starting at 9.30 am.  This enables the participants to plan ahead knowing that there is a 3- line whip to attend the Board meeting.

  • Importance of an Agenda.

An effective way to accomplish productive meetings and strong governance is to design a good agenda and run the meeting accordingly.

The Agenda should be circulated prior to the meeting, to enable all the participants to prepare and distribute any information or papers prior to    the meeting that will be discussed for decisions to be taken at the meeting.

  • Having effective meetings.

An effective meeting will not always, necessarily be a comfortable place to be!  Board meetings should create a forum where open and sometimes challenging discussions can take place.

Having diversity of personalities in the Board’s composition is a good thing and this will inevitably lead to differences of opinion, which are healthy!

The participants.

  •  The Chairman.

           The FRC says good boards are created by good Chairman.

The Chairman creates the environment and conditions for overall board   and individual Director effectiveness. This is a fundamental tenet of the role.

  •  Non Executive Directors (NED’s)

The appointment of non-executives usually triggers a requirement for regular properly minuted meetings.

Having NED’s provides an opportunity for the company to obtain           feedback on what they are doing from someone who can take a less introspective view.

  •  Executives.

 The Board meeting can easily become an extension of the Senior/Executive management team meeting and thus become purely operational in its deliberations.

  • The Board meeting, whilst monitoring the “day to day” activities of the company should essentially be involved with “ the tomorrow”; assessing and managing risk; developing and promoting  the executives collective vision of the Company’s purpose, culture and values in determining strategic direction.
  • If the Board meeting becomes an extension of the operations committee, without outsiders (NED’s), where only operations are discussed and very little strategy, behaviour can become much worse.  This is particularly so if the Chairman/CEO is a bully, with executives taking it in turn to be ritually humiliated, resulting in an unpleasant and embarrassing meeting.
  • Secretary.

It is essential to have someone nominated as the Secretary, to take accurate minutes, support the Board members and make sure that Agendas, papers etc are circulated

What makes for poor Board meetings?

  • Meetings – repeatedly called and cancelled at short notice.
  • In appropriate meeting venue –  room too small, hot/cold, noisy, poorly soundproofed.
  • Documentation – no discipline about producing and circulating in good time even the most basic information.
  • Chairmanship – the importance of this role cannot be over emphasized enough. An ineffective Chairman allows the meeting to get out of control. Discussions become irrelevant, no clear decisions are reached, some people are allowed to dominate a discussion and others ramble on. Alternatively, meetings are rushed with insufficient opportunities for discussion about detail and risks involved.
  • Poor behaviour – a number of issues, bullying completely stifles discussion, as no one is willing to raise their head above the parapet.

Interruptions allowing participants to answer phone calls, read emails, etc.

  • Lack of respect – for other Directors so discussion becomes a full blown row or shouting match.
  • Attendees – appearing at meetings unannounced and not properly introduced.
  • Late circulation of minutes and papers.

What makes for the best Board meetings?

  • Regular meetings – in a suitable venue with agendas (prepared in consultation with the Chairman and Directors) and most papers distributed several days beforehand in accordance with an agreed timetable.
  • High quality board documentation – erudite papers which are to the point and ideally all produced in the same format with an overview of each part of the business.
  • Strong effective Chairman.
  • Regular Board reports being taken as read – with the author just restricting their comments to the highlights so that discussion is focused on the important issues.
  • Sufficient time being allowed – for discussion on contentious or business critical issues to be debated or challenged.
  • Clarity on actions required – time scales and responsibilities.
  • Empowering managers – below Director level to give occasional presentations on their particular areas of expertise. Gives the Board the chance to better understand the dynamics within the company.
  • Consider adoption of “consent” agenda items – where the Board agrees at the beginning of the meeting that where some papers have been circulated and the Board is fully aware of, and have discussed all the pertinent issues, that approval can be given without further discussion.

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