3 factors that contribute to more effective board work
The board plays a major role in the development of an organization. It has to ensure that activities are kept under control, while at the same time adapting to the interests of members or shareholders, external developments and market demand.
Here we examine and present how boards can become more effective by looking at competencies, composition and how digitalization and automation of processes can help. Based on the report presented by PWC together with The Conference Board, boards should review their skills, strategy, create more understanding of the business and its development and look to improve their efficiency and productivity. 89% of chief executives want to replace one or more of the board and only 29% believe that the board is performing a good or excellent mission. The report shows that there is much to develop and improve in boards and their work.
Mission of the Board
The Board ensures that the organization meets its financial and legal obligations and that policies, guidelines and strategies are followed. The Board is an executive body that takes decisions and implements actions so that the organization carries out its commitments.
Responsibility of the Board:
- Ensure compliance with policies and guidelines
- Creating and leading organizational values
- Keep track of your organization's financial performance
- Create and implement structural plans
- Ensure that strategies are followed through
- Accountable to members or shareholders
This is a big responsibility for a board member who should not take their role lightly, requiring both problem-solving and skill. Complex problems and difficult issues may arise and require patience, good communication, the right framework and a wide range of skills within the board.
Broad expertise within the Board
The experience and expertise of the Board is therefore one of the main factors of a sustainable and stable organization, as the Board reflects the business and is its founding and executive body.
Communication in focus
Communication within the board is key. Therefore, all board members must be effective communicators. The board should be skilled in using communication tools to ensure smooth written and oral communication, which greatly facilitates board work. Board members should be good listeners as well as speakers and have an open mind to new approaches, strategies and visions.
Decision-making skills
Fundamental to board work is making decisions that affect both the daily work and the whole organization. Therefore, board members should have good decision-making skills, which usually come with experience and good procedures. It is important to produce a good basis in time and that all board members can participate in the discussion and be involved in the decision.
Visionary and entrepreneurial leadership
Navigating between day-to-day issues and seeing the bigger picture can sometimes be a challenge, so it's good that board members have visionary leadership qualities. It's important to be able to communicate the vision and thus motivate colleagues. It is also good to have entrepreneurial qualities, especially when solving problems and when it is time to move from idea to implementation. Both visionary and entrepreneurial leadership can ensure that the organization develops and manages crises and difficult situations, whether internal or external influences.
Financial literacy as a basis
To ensure the long-term future of the organization, financial literacy is needed to interpret and manage reports and ensure that the business is financially stable and generates growth. Being able to set up a budget and read reports is a priority as it provides an opportunity to evaluate risks, predict results, make the right investments and avoid difficult financial situations.
Board composition with a focus on diversity
The McKinsey&Company report shows that ethnic and gender diversity in management teams leads to more profitability and demonstrates higher efficiency. Diversity provides a broader perspective and creates opportunities to reach a wider audience with their business as well as a stronger foundation when the organization faces challenges regardless of internal or external influences.
"Gender diversity in management teams is strongly correlated with profitability and value creation." - McKinsey&Company;
Diversity
Diversity within the organization, and especially within the board, can promote innovation and bring more ideas from different perspectives, which can help the organization to adapt to external developments and market demand. It also helps the organization to comply with gender equality practices and national guidelines.
"Organizations that have ethnically diverse management teams outperform other organizations by 33% in profitability." - McKinsey&Company
Digitization of processes and data
Board members often sit on various assignments where time is precious and therefore the board work in organizations should be as smooth and efficient as possible. Many people who sit on the board know how much energy and time is spent just administering and distributing meeting documents, so it is important to have the right tools that make it easier for all board members to be able to carry out correct board work.
Software designed specifically for board members means that the board can speed up processes, offer remote working options and conduct meetings smoothly. A Board Portal is therefore an optimal solution with features such as e-signing, digital meetings, document storage, project management, digital decisions and board calendar, freeing up time and allowing board members to focus on core business issues and development.
The rise of hybrid working and digital board meetings means that many board members expect a solution and this is where software plays an important role in supporting effective board work in the organization.
Want to know how our Board Portal can streamline your board work?
Book a demo and try the Board Portal for 30 days free of charge without any obligations.
During a demo you will:
- Review of the platform's features.
- Answers to questions and concerns.
- Tips on how to run your board work in a smart way with the Board Portal.
