How to boost board effectiveness
Interview with Karen Wauters
Efforts to increase board effectiveness have been one of the themes of ILA’s 15th anniversary year. Yet, what is an effective board and how should directors work to maximise this? We spoke to Karen Wauters the newly elected chair of ILA’s board organisation and effectiveness committee about these key questions. She also discussed how she sees her role and that of the committee.
“High performing boards require effective communication which in turn requires effective, active listening,” Karen said. “This means asking good questions which are the foundation of a strong board culture aligned with an organisation’s long term goals.” These reflexes serve organisations well when they are under pressure. “Particularly in a crisis, it can be easy to focus on the urgent decision at hand, but it is vital to maintain awareness of the bigger picture,” Karen added.
Sustainable Governance - How to embed ESG
This is particularly important as many organisations seek to embed ESG considerations throughout their operations. As businesses increasingly seek to represent the interests of “people, planet, and profit” in their everyday activity, “greater focus will be put on communication with all stakeholders to ensure a healthy balance and long term perspective of these priorities,” Karen said.
The crisis has obviously altered much about the way we work, but ultimately the basics have not changed regarding leadership. “Effort is needed at all times to maintain and improve these fundamentals,” she noted. She also underlines the importance of ethical and emotional intelligence, and well-being within boards and organisations. “It is often better to aim to over-communicate to maximise engagement throughout,” she said.
Board Composition - Wide range of skills required
As vital as the hard-skills of board work are (such as market intelligence, legal, accounting, digital expertise, etc.), personal qualities are also essential to building effective teams. All these skills can be learned, and Karen sees efforts to self improve in every domain as an important part of taking a professional approach to being a director. “Engaging, exploring, explaining with quality communication is required at all times, and directors should be willing and able to change their approaches when circumstances require,” she said.
These adaptations are helped with board dynamics characterised by openness, cohesiveness and mutual respect. Talent is essential, but so is trust. “Each board needs to have sufficient depth and breadth to be able to give constructive feedback and support to executives, and this requires a diversity of outlook and experience,” Karen said.
Key role for the chair
The chair must ensure that all these views can be heard and will influence discussions. It can be too easy to forget this imperative even in normal times, so having the discipline of going around the (virtual) table becomes even more important now. Also, recent years have taught us of the seductive perils of consensus. So, if discussion does not emerge internally, boards might need to ensure sufficient directors are willing ask probing questions. This might even require appointing a semi-formal “devil’s advocate” to challenge assumptions in a constructive fashion.
“As we move towards hybrid meetings which mix in-person and online presence, a continued effort will be required to take account of spoken and unspoken communication,” she said. Whether online or in mixed settings, extra care must be taken to ensure every participant has the same access to the freshest data and reports. Again, this has always been an important requirement, but it has been brought more sharply into focus during the era of social distancing.
As for her role and that of the board effectiveness committee, Karen sees this as having broad scope. “It touches on many aspects of board work, so our role is to collaborate with other committees to produce insightful, practical advice regarding both long term goals and the emergence of new challenges,” she said.