Julie works with boards and directors to enhance effective dicision-making
When did your board last review their delegations and consider if they are still a good fit?
Correspondence between Palace and Australian Government officials when the Governor General dismissed the Prime Minister of Australia in 1975 reveals that the people concerned acted upon the delegated powers even though their actions were unprecedented and highly contentious.
It is clear that the actions were not taken lightly and that both parties took legal and other advice before acting. However, they did act without first informing the Queen.
Sir Martin Charteris wrote “these powers do exist and then the fact that they do, even if they are not used, affects the situation and the way people think and act”. Wise words.
He went on “This is the value of them, but to use them is a heavy responsibility”.
The message for boards is clear. If you have delegated power; it will be used. That use may be contentious 25 years later. It may or may not be appropriate. You must know what is delegated, to whom, and for what purpose.
Review your delegations every time you have a new CEO, strategy, or environment. It could be your best use of scarce board time.
Presenting to the board is one of the most important and impactful actions you can take
Anyone who is in the boardroom is taking part in leadership. It is important that everyone has the ability to influence decisions to get better outcomes. This includes each director when he or she takes part in discussions as well as every executive or consultant who makes a formal presentation.
Here are ten top tips to help you get it right:
Don’t be daunted. Presenting to the board is an important and onerous task. If someone has recommended you to make a presentation in the board room they have done so because they believe that you have what it takes to make a good presentation. Boards are important. Nobody is going to recommend a poor presenter, or presentation by somebody who has insufficient knowledge of the topic. To do so would reflect badly on them far more so than on you.
Be prepared. Understand why the board wants your presentation. Do they need background information on a topic, or a report on progress, or is there a decision which the board must make. If you understand what your presentation is expected to achieve you will be able to develop your presentation so that it does achieve that.
Understand what boards do. The board is the ultimate decision making forum within any organisation. Individual board members have very little power but the board as a whole, acting in consensus, is empowered to perform or delegate all of the business of the organisation. The board should act on behalf of the shareholders. The aim of the board is to enhance shareholder wealth or, in a not-for-profit organisation, to ensure that the organisation does what the people who founded it wished it to do. Make sure that your presentation helps the board to fulfil its aims.
Understand how boards work. Because boards work as a team, rather than as a group of individuals, it is important that they discuss issues thoroughly and form a group decision. When presenting to a board, even if you are giving them background information, your aim should always be to enable the board members to have a good discussion of the topic and reach their own understanding and form a basis the future decision-making.
Understand board protocol. It is normal in most boardrooms for all information to flow to the board under the direction of the chairman. You can expect that experienced board members will address their questions to you through the chairman. The chairman will also manage the amount of time that the board can dedicate to anyone agenda item, and may ask you to spend more on less time on your presentation than previously envisaged depending on the amount of time the board has already spent on other issues. It is wise to enter the boardroom with the ability to present at least 20% more than you planned to present, but without an additional 20% more slides. You should also be able to achieve your objective even if your time is cut by 20%.
Allow the board to prepare thoroughly. Boards need to discuss the information presented, and to do that they need to understand it. Try to provide a background paper or briefing report which can go to the board with the agenda and other meeting papers so that the directors are “up to speed” before you present.
Discuss rather than present. Boards sit through a lot of presentations. Rather than subject them to yet another presentation, try to summarise very briefly the information you have provided beforehand, and then facilitate a discussion with the board members. They will be much happier that the things they say them with anything you can say.
Provide good quality information. Boards need information that is relevant, in perspective, timely provided an appropriate frequent intervals, and reliable consistent coherent and easily comparable with other data, and above all, clear and easily understood. Be sure to name your sources, quote references, and alert the board to any inconsistencies between different data sets that you might have incorporated into your information.
Set the content at an appropriate level. What goes into a report depends upon what the board already know, how important this report is to the board, whether the report is in a written or verbal form, any supporting information, etc. Do not gloss over the risks involved. Boards need to understand the worst possible outcome, the most likely outcome, and the best possible outcome in order to make an appropriate decision having full awareness of the risks involved.
Be punctual and polite. Board members are important people, they should not be kept waiting. Be sure to attend the meeting a few minutes before your appointed time and to allocate sufficient time so that if the board is running late you do not have to rush your presentation or leave before the board has finished the discussion. Remember that manners are important and that people will respect you if you respect them. Please and thank you are the two most important words in your presentation. If a board member interrupts interjects, rather than react to their rudeness show your good manners, and pause politely to listen to their comment and deal with it before moving on.
Following the 10 tips above will help you to present effectively and help your board to make the best and most appropriate decisions following your presentations.
Julie works with boards and directors to improve their ability to build great companies
Representative boards are on the increase. Proportional community representation is becoming a key driver of board composition.
20 years ago, a female company director was considered a strange and rare occurrence – unless their husband or father had died and they inherited the shareholding it was almost unheard of for large companies to have women on their boards. Now listed companies are scrutinised if less than 30% of the board members are female and a 50/50 gender balance is considered desirable. Government boards have led the way with gender balance now the norm.
Board attention has started to shift to national and cultural diversity. Government boards, in particular, are looking to retain their lead and reconstitute their membership to reflect their communities or to implement social justice policies.
This has led to an influx of people into boardrooms who have not had the ‘typical’ corporate background and who may lack the support of a peer group or mentor who can help them to succeed in the high stakes board environment. In particular, current governance ideals suggest that new directors should immediately have an impact and increase the relevant skills of the board.
A board is a decision-making body, and it is important that all directors contribute to, and support, effective decision-making. To do this, directors need to be able to influence the other board members so that their personal expertise and perspectives enrich the group discussion and consideration prior to each decision being reached. Diverse cognitive and discussion styles can hamper influence and even understanding. This can slow decisions and it is important that diversity never increases to the point that – like, for example, the United Nations – diversity slows decision-making and restricts the ability of the organisation to have an impact.
Three practices can help boards to get immediate benefits from their increased diversity without suffering the risks:
1 – Provide a board education session very shortly after the arrival of the new recruits to establish norms of conduct and expectations. A skilled facilitator will be able to speed up the process of forming (or reforming) the board into a cohesive team. Cover all the basics including conflicts of interest and their management, legal duties and responsibilities of directors, confidentiality expectations, etc.
2 – Develop a comprehensive director induction pack (welcome to the board pack for NFP boards). If at all possible this should be provided to prospective directors before they have joined the board. The pack should contain the forward schedule of board and committee meetings, protocols for minutes and papers, process for information requests, etc. If your new directors know what is expected they will find it much easier to hit the ground running and add value from day 1.
3 – Provide a ‘board buddy’ to help the new director during their first year on the board (either a professional board coach or an experienced director). It can be very helpful to have someone to discuss – in absolute confidence – any surprises or issues as they arise. Ideally this should be someone who is trusted by both the board and the new director and who has a depth of governance expertise to assist the new director.
Diversity makes board decisions better. It is worth putting in the effort to make the trend towards diverse boards pay off for your board.
Julie Garland McLellan is a consultant who works with boards and directors on the practical skills that add lasting value.
Surely no board would recruit a CEO or director solely via video? Surely that would breach your duty of diligence?
Unless you happen to be a board that needs a CEO or director right now.
Then you might have to.
There are a few things that you can do to discharge your duty, stay out of court, and make a great appointment.
1 – Delegate to a nominations committee or specially appointed taskforce – a small number of committed people is better than a larger number with diffuse responsibility.
2 – Develop a comprehensive profile of your desired successful candidate – what experience will they need, what learning style should they exhibit, how should they interact with staff and the board now and under normal circumstances, what would make the difference between a good candidate and an outstanding candidate?
Remove cognitive bias
3 – Design your process carefully – include time for discussions about candidates, with candidates, with referees, about referees, and use a skilled experienced recruiter. Make sure that you will be able to filter personal bias and subjective reactions from the factual content. Remember ‘chemistry’ and ‘cultural fit’ are as important as ‘track record’ and ‘formal qualifications’. Building that into your process takes thought and skill but adds value.
4 – Drive the process decisively – it is easy to lose momentum, and hence good candidates, so make sure you make progress. Schedule meetings in advance and block out diary time so that the committee can discuss each step without endless rounds of calendar synchronising or one person missing a meeting.
5 – Determine how you will handle the contract – consider probation periods and support mechanisms for executive appointments. Unless you need the appointment to maintain a quorum, consider a two phased process for board appointments. Remember that even if the board can appoint directors to a casual vacancy only shareholders can remove a director.
6 – Don’t omit the review and reflection phase – learn from every appointment your boards make so that you gain skills and insights that will make you a more valuable director in future.
The Corporations Act allows directors to act with the degree of diligence that a reasonable person would expect under the circumstances. Pandemic times are not normal circumstances. You may not be able to do what you usually would. You can still do well and be diligent.
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Julie Garland McLellan is a boardroom trends forecaster, experienced company director and professional conference speaker.
She features frequently as a commentator on TV and radio and is the bestselling author of 6 books. Her most recent book Not For Profit Board Dilemmas is a practical guide to thriving in boardrooms as the non-profit sector faces immense disruption.
Remove cognitive bias 
Julie Garland McLellan is a boardroom trends forecaster, experienced company director and professional conference speaker.
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