Dr Sabine Dembkowski is the Founder and Managing Partner of Better Boards www.better-boards.com in London, an accredited Board Reviewer, and hosts The Better Boards podcast series. Sabine and her team have created an innovative board evaluation platform that NASDAQ-, FTSE-, DAX-, and ATX-listed organisations, as well as PE-backed firms and private and public organisations, use to improve the effectiveness and performance of their board. Her research has been published internationally.
An appointment to a board is often perceived as the crowning achievement of a distinguished executive career, particularly if the organisation is listed on the stock exchange or backed by a well-respected Private Equity firm. Once appointed, many Directors realise how challenging it is to be impactful in the boardroom. Feedback is scarce, and the reports delivered as part of a board evaluation often only confirm what they already know but not necessarily what they dared to discuss with their fellow board members.
To have a personal impact in a boardroom, one must understand the levers they can pull to be effective and contribute to overall effectiveness and performance. But what are they?
We reviewed the academic literature and interviewed board members, Company Secretaries, and Investment Managers. The research resulted in the 7-Hallmarks model of effective boards.
The 7-Hallmarks of Effective Boards
© Dr Sabine Dembkowski, Better Boards, London.
It is worth taking a closer look at the hallmarks. Each hallmark is a lever a Director and the collective group can pull to become more effective and increase the board’s performance.
The strength of the board
Recent research shows that rather than identifying what is not working, focusing on what is working is far more effective. Effective Directors are highly aware of their own and their fellow Directors’ strengths. More than that, they understand how to leverage these strengths in the boardroom. Do you understand your strengths in the context of the board you serve? Do you know your fellow board members well enough to appreciate their distinctive strengths?
Composition of the board
The gender discussion has overshadowed thinking about board composition in recent years. However, the questions are more complex. Our research identified that it is crucial to look beyond “the labels” and understand the presence and the development status of know-how areas and behaviours of individuals in a group setting. Are the know-how areas and behaviours in a group setting aligned with the strategy? Are they what the organisation really needs at this point in time?
Clarification of roles and responsibilities
The transition from an Executive to a Non-Executive career is not easy; for some, it can take years to fully adjust to their role on a board. We find that the greater the pressure on an organisation and operational performance, the more likely the lines between executives and non-executives get blurred and conflicts arise. Clarity of roles and responsibilities is a vital hallmark of any effective Board. Do all Directors on your board understand their role? Or do they step more often than they should into Executive territory?
Vision, goals, and focus of the board
The vision for an organisation is one of the most hotly debated topics on any Board. It is more than challenging at present to align on a vision in the boardroom as external circumstances change quicker than ever before, and what has been taken for granted is shaken and questioned. As the vision determines the goals and focus, it is crucial to be clear. However, we see that this is not necessarily the case in many boardrooms. Is your board clear and aligned on the vision for the organisation?
The structure and organisation of the work of the board
The organisation of the work is in the remit of the Company Secretarial team and is determined by how well they, the Chair and CEO, work together. Although the Company Secretary profession is nowhere more advanced than in the United Kingdom, it is never perfect. There are always issues that deserve attention and can be improved. Do you understand what specifically can be improved on the structure and organisation of the work of the board?
Ability to resolve conflicts
Effective boards and their members understand how to resolve conflicts within the board and between the board and the Executive team. Is your board a safe space to talk openly about emerging issues that may result in larger conflicts? Do you understand how you can contribute to resolving conflicts? Does your board understand how to resolve conflicts?
Regular reviews and reflections on the work of the board
Regular time-outs, where board members can connect and deepen relationships, leave the daily work behind, and reflect on how they work together, are the hallmarks for which there is the greatest evidence in the academic literature. There is a strong and clear link between the time taken to reflect on how a board works together and its effectiveness. Although there is clear evidence, few boards take the time to reflect on how they work together in our fast-paced world. Does your board take time to reflect on how it works together?
The 7-Hallmarks of Effective Boards highlight the levers every Director and the collective can pull to improve the effectiveness and performance of their Board.