13 February 2020 | Comment | Article by Mererid McDaid

What makes a Board a successful one?

There is a common belief that if you follow good governance, you will have a successful board. However, high profile board failures in both the private and the third sector seem to be at odds with this. Over recent years, we have seen trust in the third sector, in particular, shaken as a result of significant failures by the board. However, these boards often have highly skilled, experienced and knowledgeable trustees, who will have followed good governance practices. So, what can board members do to ensure that, even if an organisation has the right governance arrangements in place, the board operates successfully?

 

Board member commitment

Firstly, board members have to turn up to meetings, regularly. However, this is not enough. The board member’s role is to contribute, support and challenge. To do so effectively, enough time has to be set aside before the meeting to prepare. If a board member has too many other commitments or is not fully committed to the sector or the organisation itself, then they may not be the best person for the role.

It is particularly troubling when a board that is comprised of highly skilled, intelligent people, fails. Unfortunately, the reality is that this happens. Whilst all board members will be expected to use reasonable skill and care in undertaking their duties, there is also an expectation that if you have a particular skill (such as, for example, financial, legal, HR) that these skills are used effectively. But care needs to be taken that board members do no over rely on particular individuals. Each board member will have their own unique set of skills and should not be afraid to use them. This means speaking up when something does not sound quite right or where something needs to be explored further.

 

Board diversity

A diverse board is important; be it members of different age, gender or ethnicity. There is good reason for this. When reviewing diversity of a board, however, it is crucial that the right balance is struck. For example, some older board members (both in age and duration on the board) will have invaluable experience and knowledge of the organisation, to lose that in one stroke can be unsettling and damaging. Therefore, a managed rotation of members is preferable.

 

Building a strong board

Being a strong board often rests on how well the board works as a team. Board members should have mutual trust and respect for each other to allow them to discuss and share difficult information; it should be a board of equals, where each member receives the same information to avoid the risk of divisive cliques forming. The board should have a culture that allows members to be frank and candid without fear of being seen as disruptive or disloyal. Such a culture will often depend on having a good chair but also by ensuring that members have an opportunity to build a strong working relationship.   

 

How to offer the best to your board

So, if you are a board member (or thinking of becoming one), what can you do to ensure that you offer the best to your board?

  1. Ensure that you are able to dedicate sufficient time to the organisation to properly prepare and attend meetings.
  2. Get to know the organisation as best you can; meet the management team and some of the organisation’s staff; understand the needs of the clients it serves and their community.
  3. Get to understand the sector as best you can and the challenges it faces by attending related conferences, training sessions and events.
  4. Get to know your fellow board members; find out how long have they been on the board for what motivates them to stay and what skills they have.
  5. Challenge if you feel that matters under discussion are at odds with the objectives or values of the organisation; ‘group think’ can sometimes lead to bad decision-making, don’t be afraid to raise questions or ask for clarification.
  6. Learn to read financial statements; this is an organisation that has to run to budget in order to succeed. Board members must be able to understand the financial information they receive in order to support and direct the organisation to be robust and financially viable.

For more information or to get advice on this topic, please get in touch using our contact form.

 

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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