Credit Union Times November 2023
Stuart R. Levine, Chairman and CEO, Stuart Levine & Associates LLC
In order to face the challenges ahead, it’s important to strengthen board cultures and to increase the skills and diversity of backgrounds and professional experience on boards. Board assessment processes that generate confidential data and non-attributable insights will be the cornerstone of keeping momentum moving forward in terms of improved board performance and enhanced board culture. Conducting this process in a privileged manner, while understanding unnecessary liability is a cornerstone as well as respecting people’s time and understanding the responsibility that is entrusted through this important activity. Open communication and efficiency are key factors as well to ensure a constructive gathering of information.
In addition to providing overall score averages to no more than thirty well-crafted questions, distinct and varying opinions of board members can be captured as well as meaningful improvement suggestions in key segments such as Committee Chair communications, board succession and the board’s oversight role versus management’s role. By capturing comments concerning board management, board composition, governance and culture, the identification of key issues provides a path for improvement in board performance and culture. Linking in and hearing from the CEO and a few key senior officers can often be an important subtlety that provides nuances that can improve board effectiveness.
Organizations today face common challenges. Spurred by leaps in technology, global competition and growing consumer expectations, organizations must either transform the way they work, or risk being left behind. Strategic governance transformation and oversight is required to ensure compliance with the evolving regulatory environment as well as changes in investor expectations and potential shareholder and class action lawsuits. By defining the criteria for productive board relationships, board culture and adherence to strong governance principles through an engaged participant process, it will create the requisite ownership required to embrace change.
Developing a firm governance foundation positions organizations and boards of directors to act with resolve on key strategic priorities to deliver value to stakeholders. Making real and lasting changes requires extraordinary focus, not only on strategy, but with the people responsible for governing the organization. By revitalizing the board of directors, this will have the effect of strengthening the culture of the board as well as the strategic priorities identified through collaboration with the board of directors and the CEO.
Conducting a comprehensive charter review in addition to a board assessment can ensure proper identification of responsibilities and accountabilities of individual members of the board. This will ensure the proper functioning of all committees and raise the level of governance to secure the achievement of strategic priorities. This will in turn accelerate the opportunities to recruit and retain the most effective talent for service to the board, protect the organization’s future and establish a revitalized culture of compliance in tune with the regulatory changes required now and in the future.
Very often an important component of this process becomes coaching and mentoring the CEO. The creation of a CEO dashboard that identifies priorities will be accretive to the future growth of the organization. This mentoring focuses on enhancing the ability for effective strategic communications with the board of directors as well as with the executive team. By prioritizing the utilization of CEO energy, this additionally creates the desired momentum for the recruitment of the next generation of C-Suite officers.
It’s best not to create a plan for the board and the CEO. By working in tandem with them and having them develop and create sustainable governance processes and platforms for which they will be responsible, it is the most effective way to ensure change. Through a highly inclusive process, directors take ownership, understand their responsibilities and make any transformations a success.
High quality board assessments are one of the most effective tools for ensuring high functioning boards, organizational resilience and long-term value creation. By allowing board members to share candid feedback in a trusted environment, it will lead to superior board dynamics, clearer agendas, streamlined processes, enhanced meeting materials and more suitable board and committee compositions. By identifying board strengths and areas for improvement, it can lead to enhanced learning programs, individual director coaching, and succession planning to guarantee the appropriate skills matrix required by regulatory trends as well as evolving new strategies.
Change is hard. But taking a look in the mirror will stimulate discussion in a highly constructive manner and provide recommendations for board optimization and effectiveness. Highly functioning, engaged boards do all they can to up their game. Board assessments, run in the most confidential and engaging manner, are a crucial tool that will provide value to the board and increase shareholder value.
