Improving Boards of Directors’ Effectiveness
Describe at least six (6) recommendations that you would make to improve the effectiveness of today’s boards of directors. Explain your rationale for the recommendations by discussing how your recommendations would improve the performance of the boards and the companies they oversee. Then give your opinion as to which of these would be the most important recommendation and justify your opinion.
Recommendations to Improve the Effectiveness of Boards of Directors
Board directors poise as the image of a corporation and have a role in strategizing for the company’s performance. In this regard, various recommendations are suitable to improve their effectiveness. Among these include evaluating performance to pursue opportunities for improvement. Organizations embrace different processes, procedures, and policies to achieve their goals. However, some may not be effective and may negatively affect the performance capability of solid policies. In this regard, evaluating performance enables the directors to lay down the weak procedures and implement stronger ones (Cheng et al., 2021). Besides, the strategy helps understand various skills and competence owned by different directors to accord duties appropriately for maximum performance.
Further, appointing a competent chairperson is critical in improving directors’ effectiveness. A competent chairperson will lead in establishing trust and an appropriate culture embraced by directors. Acknowledging the directors’ role and demonstrating strong leadership abilities plays a crucial role in establishing a comprehensive relationship with the CEO and gaining the capacity to lead decision-making processes and conduct meetings (Cheng et al., 2021). This substantially drives the motivation and performance of the entire employees, hence a competent organization.
Another recommendation concerns improving the board oversight. Strong oversight is vital in monitoring the alignment of boards’ decisions with the company’s strategic direction and legal compliance to evade possible crises (Cheng et al., 2021). Board oversight will enable the directors to identify the key drivers of success and implement appropriate measures. The directors should make requests to access all relevant information to make structural decisions through site visits, presentations, and briefings. This allows them to interact with experts in different fields to widen their skill level, which is necessary for organizational performance.
Additionally, clarification of the board’s role in strategy is essential. Affirmatively, the board is responsible for formulating and adopting the organizational strategic direction. It is, therefore, important that the directors determine the most appropriate roles in undertaking and clarifying the understanding of strategies with the management (Sithipolvanichgul, 2021). This will help to adopt and implement specific policies and procedures that poise a capacity to derive the best outcomes in accordance with the company goals.
Another way to improve directors’ effectiveness is by conducting board member development during every meeting. Notably, the continuous growth of directors’ capabilities is a critical challenge attributing to factors such as limited budgets and limiting time opportunities for traveling and participating in professional education. Such could be addressed by initiating a slight collection of development at every meeting. This includes reading and discussing a single article concerning governance and listening to accountants’ presentations or customers as they present their perceptions about a product or service (Sithipolvanichgul, 2021). Such equips the directors with diverse knowledge and understanding of value proposition. Besides, the directors grasp new perspectives and insights to expand their leadership capacities.
Holding regular ‘product’ or ‘service’ tutorials is also vital to enable the directors to maintain a close ‘feel’ of the character and nature of their business. The enhanced exposure and knowledge provide an opportunity to interact with the program leaders and managers to better understand the CEO’s leadership and management capacity (Sithipolvanichgul, 2021). As such, the directors can quickly identify the gaps in the production line and the CEO’s inefficiencies for proper measures.
The Most Important Recommendation
Assertively, conducting board member development regularly poises as the most important recommendation. Directors tend to be occupied with numerous tasks in running an organization, and this limits their free time to attend educational forums. In this regard, utilizing the meeting times to pass information and widen their understanding is a critical approach.
References
Cheng, J. Y. J., Groysberg, B., Healy, P., & Vijayaraghavan, R. (2021). Directors’ perceptions of board effectiveness and internal operations. Management Science, 67(10), 6399-6420.
Sithipolvanichgul, J. (2021). Board of Directors’ Effectiveness and Enterprise Risk Management: Do Effective Boards Improve Risk Oversight?. Thammasat Review, 24(1), 133-167.
