Tips for High-Performing Board Directors

If you’re a board director or aspire to be one, you’ll value these 5 insights about high-performing directors. I shared some of these with a recent Executive MBA class on Corporate Governance.

As I explained to the class at the University of Wisconsin—Madison School of Business, these insights come from my 30+ years serving on boards of all kinds: fiduciary and advisory; family owned, non-profit; companies with assets in the billions to start-ups, foundations, the national board of my trade; the board of one of the first venture capital funds to invest in women and minority-owned businesses.

1: Most board directors think about "margin." The best understand that two other things must be in place to ensure competitive advantage and thus, future viability: A branded business model, with a flywheel that creates immense value for consumers and stakeholders. These require director oversight of strategy.

2: Most every director sees themself as a strategist. Yet a survey done by The Conference Board & DDI found that of 25,000 global executives surveyed, 85% were not confident in the strategic ability of colleagues. This means every director’s self-assessment of their strategic chops is probably misplaced. Great directors forever hone their strategic abilities. (Among those I study are Roger Martin and Scott Cook, with whom it was my privilege to serve on a board for years.)

3: Terms commonly used in board rooms today include digital, branding, marketing. flywheel, competitive advantage, and yes, strategy! Most every director has a different definition of each. The risk? Directors approve plans and investments they don’t fully understand. High performers press fellow directors and management for definitions and align on their meaning.

4: Then there are committee charters. The most effective make clear what they’re to accomplish. Audit charters have always been specific: Keep the company within compliance and out of financial or legal jeopardy. In contrast, charters of other standard committees tend to specify only scope and process. They don’t mention what they’re to achieve. Great directors correct this oversight and, in the process, optimize the performance of fellow directors and management.

5: The best directors demand performance reviews. Most common ask directors to respond anonymously to general survey questions. In my experience these have little impact. The reviews that do are the 360s in which peers candidly share what each director does that’s unproductive and highly valued.

Prof. Shawn Dennis, an experienced director who teaches the UW in the governance class, agreed that high-performing boards only become high performing when every director takes seriously all it takes to excel.

For more on high-performing directors, see the article I co-authored in Directors & Boards, a publication of National Association of Corporate Directors.

For more information on services offered by Lindsay Foresight & Stratagem, visit https://lfands.com.