Why be Good When You Can be Great

Since 2019, being a director takes more time, is more difficult, and is not going to get any easier in the future. This is the summary of the introduction to the recently released McKinsey & Company report on increasing a board’s long term impact (read it here). I strongly suggest reading this report in full for your self – it is only a few pages long – but I will try and synthesize the key points into just a few paragraphs.

Essentially, McKinsey surveyed boards of directors and found that there are five key changes to processes that high-impact boards use. As noted in the report, “We identified five key changes to these operating models that very-high impact boards are significantly more likely than others to have made.” Who doesn’t want to be part of a ‘high-impact’ board? So, in summary, the fey changes are:

1. Seek company information more proactively:
   That is, asking for and obtaining from management additional information to that supplied in the board papers. This better prepares directors to “participate actively in discussion, to ask good questions, and to review the management team’s proposals more constructively and critically.”
   
   
2. Invest time in onboarding:
   Having an effective onboarding program that is partially individualised for each director and includes elements of organisational strategy and culture.
   
   
3. Increase the cadence of board evaluations:
   Most boards do not engage in regular board evaluations, so to do so, and to include individual director evaluations, sets your board apart. The report also notes that regular feedback sessions after every meeting is a useful tool.
   
   
4. Create space for nonexecutive voices:
   Allowing regular time and space in each meting for the independent directors to have candid discussions without the executives in the room “increases accountability for both the board and the organisation as a whole.”
   
   
5. Appoint a char who can facilitate effectively:
   “The chair must create a clear agenda that balances fiduciary and strategic topics, encourages all board directors to voice their opinions, and effectively synthesize and summarise different perspectives for form a good basis for decision making.”

The report unapologetically asserts that these processes are effective and give directors and board the best chance to be high-impact. How does your board compare?