Written by: LaVada English, MBA
Founder and Owner, LaVada English Consulting
AABLI Alumna, Class #10
As regulatory and other pressures increase, boards are expected to become more deeply involved, taking on a strategic role to ensure that organizations thrive. Traditionally, boards have become involved in strategy when there were specific reasons to do so, such as the retirement of an incumbent CEO, a major investment decision or an acquisition proposal.
Today’s CEOs, however, need support from and collaboration with strategic thinkers. Board members must be prepared to provide long-term business guidance. So how might the board make sure they are able to do this? If management presents a bold five -year plan, is your board equipped to provide needed fiscal guidance, people capacity advice or long-term business recommendations?
Three best practices can help:
Balanced Board Tenure – A study conducted by Harvard Law found a “strong correlation between board tenure balance and performance, as well as an inverse relationship between board tenure balance and risk. Companies whose boards had relatively equal representation across all categories of the tenure spectrum tended to rank higher in financial performance and had a lower risk profile compared to the rest of the market. Meanwhile, companies with directors concentrated in one or two tenure categories exhibited the worst performance and the highest risk profile.” (Posted by Kosmas Papadopoulos, ISS Analytics, on Saturday, September 1, 2018: https://corpgov.law.harvard.edu/2018/09/01/board-refreshment-finding-the-right-balance/)
“Upskill” Your Board – For-profit boards often require their members to hold a pedigree of experience and knowledge, while nonprofit boards may be composed of a combination of experienced professions and community members. Either way, if there is a need for training and development in the board membership, it needs to be addressed. Left ignored, these skill deficits may be costly.
For new and seasoned board members, allow space for growth through learning, especially when new strategic initiatives are introduced. Adapt learning as part of the norm, bringing in experts to review industry trends, new technologies and additional vital information. Certification programs from intuitions including Duke University, Cornell University and Deloitte University, offer leadership and board credentials that ensure your board members are ready to lead. (Shameless plug directed to the African American professional: Consider the African American Board Leadership Institute’s flagship Board Leadership Program.)
Hold Your Board Accountable – Analyze board expectations annually, addressing outdated bylaws. Review expectations. Determine how duties and responsibilities must change to keep up with new regulations. As a new requirement for receiving government funding, I recently trained a community board to understand its responsibilities. Most of the board members did not understand the risk they inherit, or their rights as sitting board members.
A well balanced and trained board improves the operation of the organization. When board members are strategic, it is easier for them to make decisions. The business of the organization proceeds efficiently because the board and the CEO are confident in their ability to effectively partner in moving the organization forward.
LaVada English is a workplace cultural development expert and a proud graduate of AABLI, Class #10. She is the founder and CEO of LaVada English Consulting. English and her associates have the expertise needed to customize programs, policies, and practices that elevate organizations. With experience in human resource management, DEI (diversity, equity and inclusion), employment law, talent acquisition, and organizational development, English and her team are instrumental in impacting the future of many public and private agencies.
This blog is not written by aabli.org or The African American Board Leadership Institute. The author is solely responsible for the content.