Interacting effectively with board members is a competence that develops over time, with experience. Before we get into how to improve effectiveness of these interactions, it is important to understand the context and background of the board’s expectations. Here are some of my insights drawn from experience:
The board is there to help – therefore they are quite likely to challenge management team’s thinking. This is not an adversarial role but by doing so, board members help the management team think hard and evaluate the implications of their various actions or absence thereof. Therefore, it would be in the management team’s best interest to debate and workshop with the board, the rationale and reasoning of their actions (or inactions) and initiatives, strategic as well as tactical. By engaging intensely and transparently with the board members not only do the management teams learn a lot, they strengthen their professional credibility as well.
Understanding the problems and issues on hand – Boards are generally keen to know how well the management team understands their own problems and issues, whether they have potential solutions for them, and if something is being done about it. Being aware of the challenges and also being able to spot them proactively is the hallmark of an agile management team. The board would appreciate an upfront discussion around key issues rather than being hit by an unpleasant surprise or business shock later on. If they are made aware about a smoldering issue, it is quite likely that they can provide guidance and advice on resolution before a fire breaks out. If damage is imminent then at least there is no surprise element for anyone and an appropriate mitigation strategy can be put in place. This approach helps build rapport with the board.
The board’s role has become quite onerous - Over time, due to regulatory changes internationally, the role and responsibilities of the board members have become quite onerous alongside an increasing exposure to professional liabilities. Practically, it is not easy or possible for the board to have an oversight or do micro-monitoring of the business. Therefore, it is the responsibility of the management team, through their interactions, to provide the requisite comfort to the board. This could be on matters of relating to governance standards, compliance with laws and regulations, health and safety issues or around corporate social responsibilities. Accordingly, one needs to be prepared to answer incisive questions and address their concerns.
Board members’ credibility and reputation are also at stake – It is important for the management team to understand this point. Most people who reach board level are quite well established professionally and would enjoy an unblemished reputation. They would not want their image to get tarnished in any manner. Therefore, their concerns and expectation that the management team would not indulge in any act that could impact any reputation needs to be empathized with.
The board’s collective experience and wisdom helps them have foresight around problems and issues – The management team usually get embroiled into managing operations and solving ground level issues and at times they miss the forest for the trees. However, the board members are able to look at challenges and issues from an outside in perspective and point out a potential miss to the management. Therefore, if there is a push back from the board to management teams to competitively benchmark business performance and issues, they are essentially helping business to become resilient and adaptable and avoid strategic pitfalls.
Having discussed the background and context of board’s needs and expectations, let us look at some practices that can help improve effectiveness of interactions of a management team member with the board:
Board members might not know you closely enough. You need to build trust and rapport with them in a short interaction with them. Therefore, be concise and crisp in your articulation during an interaction.
Manage your interaction time effectively. It is quite likely that the airtime you get at a board meeting is limited. Learning to manage available time effectively would be greatly appreciated.
Board members have gone through (and probably are elsewhere still going through) the grind involved in managing complexities of a business. They might not express it, but they do empathize with you. Carry that comfort.
Never try and make up or cover up a lapse. Present data points those are accurate and complete. Board members with their sheer experience can make out if someone is trying to pull the wool over their eyes. Nothing can be more damaging than this.
Learn to anticipate expectations and requirements of different members on the board. This one can be quite challenging. With their diverse experience and strong personalities, board members are likely to place a varied set of expectations on the table. However, there is no shortcut here. One needs to learn to anticipate and handle these expectations individually and collectively.
Each board interaction is likely to provide a number of guidance inputs. Intelligent management teams learn to draw out ‘nuggets’ of wisdom from the myriad of discussion points and use them effectively.Neeraj Basur is chief financial officer at Blue Star Limited, Mumbai, India.