Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
This happens too frequently at boards of directors and advisory councils – from small business and nonprofit boards to local sports clubs, schools, churches and city councils. Often business people are volunteering their precious time and talent to help a friend who owns a company or a cause they believe in only to walk away from meetings with disgust.
Board participation can bring higher rewards than merely writing a donation check. Many people view it as an opportunity to network, learn new skills, become a more effective leader and, ultimately, further their own career. Yet, a common complaint among paid and unpaid board members alike is ineffective board meetings.
Consider this definition of a board to realize why meetings can be a major challenge: “A board is a group of individuals who don’t know each other well who come together periodically to make big decisions about an organization they know very little about,” according to Susan Boren of Spencer Stuart’s Minneapolis executive search office.
Greater board effectiveness can be achieved by answering three fundamental questions:
1. Are we spending our precious board time on the right things?
2 . Are these things being performed well?
3 . Are we meeting the needs of the organization and performing up to the best of our abilities?
Are we spending our precious board time on the right things?
Many board members simply continue their predecessors’ activities and do what feels most comfortable. But this is usually unproductive. Common time wasters include too much focus on the financial statements or operational details. Often there is one person, usually a founder, whose opinion delays decisions. And frequently the board decides to tell the CEO how to do something, which is not under the board’s authority.
Before accepting a board position, review prior board agendas to see where time is most spent. Is there time set aside for dialogue, or is the agenda a long litany of committee reports? Keep in mind that the work of a board is very different from the work of the organization. It should be more about values, mission, vision and strategy – less on detailed operational issues.
Values and mission should be clear, with evidence that the staff is passionate about them. Mission drives the vision and strategy. Without vision, meetings have a tendency to go around and around without the ability to make definitive decisions.
Board meetings should be fun and engaging while also maintaining focus on the big picture. For example, every Big Brothers, Big Sisters board meeting begins with a “little and big” story – how the lives of two people have been impacted because of the organization. This affirms what the board is doing and reminds the members of its mission.
And, do members really know each other well enough to comfortably challenge each other? The dialogue index must be high to make good decisions.
Are these things being performed well?
Board composition is a key performance factor. Consider the board’s strategy to determine if there is the right combination of skills and diversity at the table. For nonprofits, it’s especially important to invite members who typify those the organization is serving. For example, if helping the homeless, add someone who has experienced this need; or, a youth soccer club could ask alumni to join the board.
Roles and responsibilities is another key factor. Although willing to serve, many people do not understand the basic role requirements, such as being prepared for meetings and committed to fostering a “culture of inquiry.”
It is important that members show up ready to share their creative insights and candid opinions. Having the information needed to make good fiduciary decisions is a key responsibility. What’s more, fundraising is a major role for nonprofit boards, which may include minimum giving expectations of its board members.
Continuous improvement is also important to board effectiveness; otherwise, it gets stale. Peter Drucker once said: “If you want it, measure it. If you can’t measure it, forget it.” Assessing board performance annually is essential to progress.
To engender trust and buy-in, involve individual board members to create the assessment. A survey and/or individual interviews can solicit input about the board’s strengths and weaknesses, which can be summarized and shared between meetings. Areas with room for improvement and those with greater disparity of responses can be identified and addressed throughout the annual board calendar.
Are we meeting the needs of the organization and performing up to the best of our abilities?
Typically, boards are judged based on how the company or nonprofit is doing. However, a board could be doing everything right and the organization could still suffer due to unforeseen economic or industry conditions.
Think Mutual Bank’s board chair, Barb Baasch, knows progress is being made as a result of a recent assessment. She says: “First of all, we know a lot more about each other today than when we started. We’ve been very intentional in creating time in our agendas to get to know each other and members of the management team as a means to build trust within and among our team.
“We’re very clear about what our role is and, as importantly, what it isn’t. Thus, we continually question whether what we’re doing is relevant and how the decisions we’re making are benefiting our mutual shareholders.”
For a board to focus on preserving the long-term sustainability of an organization, there are several elements that indicate high performance:
Members are competent, work well together and have a good working relationship with the CEO and management team. This is especially important as the board puts in place processes, such as CEO succession.
Board members should have a good understanding of the business and the environment in which it operates. They should possess a solid understanding of overall strategies and risks.
To get intimately familiar with the organization, members can either make visits to the office or invite staff members to board meetings.
A robust board assessment process to continually improve overall performance.
Everyone wants to be on a winning team. Board meetings can be fun and engaging, if the chair keeps people focused on the mission and its strategies.
To avoid the one person speaking ad nauseam, be sure to speak up and try this little technique: Recommend that everyone gets a chance to speak before someone speaks again!
Mike Femlee,
Prouty Project:
952.942.2922
mi**********@***********ct.com
www.proutyproject.com
