New Year, New Processes – A guide to Board Efficiency
We all make resolutions each year to do something better and how we run our boards should not be an exception.
First of all, let’s look at eliminating the flab!
Does your board membership have the skills and contacts to take you to the next level? A board position should not be for life and membership should be regularly reviewed as the company develops and perhaps moves into new areas. Would any of your directors benefit from training or should they be replaced.
As well as having the right skills you want to make sure that your directors are fully engaged. So, ask yourself whether each director attends regularly, asks engaged questions and is well prepared for meetings? A director who fails to engage with discussions or who is regularly unavailable may not be that interested in the business, and you should look at replacing them. It may be that the director has been appointed by an investor in which case you may need to have that discussion with the organisation with the power to appoint about finding a more suitable replacement.
Secondly are we giving the directors the tools they need to do the job properly?
Any new director should be given a detailed introduction to the company and should ideally meet key staff. If they are new to being a director in the UK, you should offer training or at the very least an explanation of their statutory obligations.
Papers need to go out in good time before a meeting. 4 or 5 days should be the minimum and should include the financials up to the end of the previous month, an update on business progress and supporting papers for any matter on which a decision is going to be expected of the board
In framing the agenda indicate where a decision is going to be required and focus the meeting so that time can be given to discuss the most significant issues
A board also has compliance responsibilities, so any breaches need to be brought quickly to the board’s attention.
Minutes need to be distributed quickly after meetings so that any action points can be addressed promptly
And lastly what about housekeeping?
Have all your board members got suitable service contracts and is there D&O insurance in place?
In small companies some issues while important may not arise so frequently that they need to be on every agenda, so you need to have a calendar to ensure that they are addressed on a regular basis and not forgotten even in the absence of “hot issues”. This might include health and safety, absences and staff turnover, environmental issues, and data protection. You also need to ensure that the risk register is reviewed at least annually and certainly in the event of substantial business or socio-economic development.