2011 Issue 9
BoardWorks International
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The ‘Strategic Agenda’

For more than two months the North American and broader international membership of the BoardSource LinkedIn Group has been engaged in an online discussion in response to a member’s request for advice on a board agenda that helps steer the conversation towards strategy and away from operations.  At the time of writing more than 200 members had offered or asked for advice on this topic.  It is clearly something that is of considerable interest to many board members and also their chief executives.  In this article we link some of the suggestions made to our own experience in addressing this question.

As always when we look at board effectiveness it is never a simple issue. Boards that ensure their meetings are ‘strategic’ benefit from more than just the structure of the agenda itself.  This can best be illustrated by answers to the following questions.

1. Does the board have a clear understanding of its job and the value it must add to organisational leadership?

Writers on governance topics often talk about the need for a board to be primarily ‘strategic’ but does your board understand what that actually means in the context of its job?  Does it have a board charter, governance manual or some other form of job description that clearly distinguishes the board's job from that of management?  At its most fundamental this should confirm that the board's primary job is to work on and not in the business.  The board has a stewardship responsibility that means it must take a longer term view of things.

Codification of the board's job is important but so are supporting processes such as effective new board member induction.  The point of entry to the board (or even before) is the time to clarify the nature of the role and responsibilities being taken up.  This should be supported by regular professional development initiatives focused on continuous improvement in individual and group governance competency.

2.  Does the board have a work plan?

The starting point for a truly strategic agenda is a thorough board work planning process.  The most effective boards have a process that helps them to identify the critical matters that must have the board’s attention over, say, the next 12 months.  This will include a series of ‘must does’ that relate to an annual cycle (e.g.reporting, AGM) and to contractual obligations (e.g. chief executive performance and remuneration review).  Perhaps even more importantly it will include the strategic and policy matters that go to the heart of the board’s ‘direction giving’ responsibility.  An effective board work planning process quickly identifies the need for prioritizing and sequencing the most important matters for the board's attention.  These can then be scheduled into an annual agenda which, in turn, drives the content of each successive board meeting.

This process ensures that the board’s attention is on its own job and those matters that, because they are longer term in nature, would otherwise seem less urgent.  Perhaps even more importantly it helps to give the board control of its own agenda.  It is not waiting to see what management will serve up to it each month.  On the contrary, the board tells management what its meetings will focus on and what it needs from management to support those meetings.

3.  Does the board have an ‘inverted’ meeting agenda?

Many boards still work laboriously through a traditional meeting structure that is dominated at the front end by interminable discussion of the minutes of the last meeting, ‘matters arising’ and the receipt of reports from management and its own committees.  This constitutes a little more than ‘steering by looking in the rear vision mirror.’ The really important, future-facing, content of the agenda (e.g. environmental scanning, strategic thinking, policy-making, risk characterisation and decision-making) is left until last.  Almost inevitably the board gets caught up in the 'five o'clock rush' and runs out of time.  The really important board added-value part of the agenda thus gets scant attention. The opportunity for the board to give effective strategic leadership of the organisation goes into abeyance at least until the next meeting. 

The very simple solution to this traditional but barely acknowledged dysfunctionality is to completely turn this traditional agenda on its head.  Start with the important ‘thinking it through’ stuff while people are fresh and both physically and mentally present.  Schedule the receipt of monitoring reports and other matters relating to compliance at the back end (say the last third) of the meeting.  If the board runs out of time - because of the importance of the earlier matters - those reports can be taken as read.  If necessary, they can be postponed until the next meeting.  Because such matters are the subject of written reports (or should be) board members have taken on board the content before they even come to the meeting.  In any case, to the extent they are relevant those reports can inform the earlier, more strategic, part of the meeting.

Turning the traditional agenda on its head like this also forces improvements in efficiency.  The board simply doesn't have time to meander through a whole lot of inconsequential items.  Two very useful tools are the ‘parking lot’ and the consent agenda.  The parking lot concept is simply a device to enable issues and ideas that are put forward by board members but are not directly relevant to the discussion in hand to be acknowledged and ‘parked’ for possible future attention at a better time or in a more appropriate manner.  The consent agenda is a way to bundle up and 'rubber stamp' with a single motion a number of inconsequential decisions which are only coming to the board for decision for legal reasons.

4.  Is the purpose and ‘connection’ of each agenda item clear?

One of the most useful things board chairs and the authors of board papers can do is to ensure that each agenda item is prefaced with a clear indication as to its purpose.  If this was done in a more disciplined and systematic manner most boards would find that a number of items that typically appear on their agendas could disappear.  When this is complemented by the addition of a policy reference to every board paper, the impact is even greater.  If a direct linkage to a board policy (particularly the strategic plan) cannot be made, what real relevance does the report or proposal, have to the board?  These two initiatives taken together force board and management alike to go back to first principles: just what is the board's job?  Where can it (and must it) add value?  Are the board's deliberations directly connected to agreed strategic outcomes?

5.  Do the board chair and chief executive understand what the board's job is?

It is very hard to have a strategic agenda and dialogue if the raw material for the meeting provided by or through the chief executive is primarily operational or managerial in nature.  It is arguably even more difficult if the chair ‘doesn’t get it’ and lets discussion roam over anything that takes any board member’s fancy on the day.

6.  Do quality board papers get prepared and circulated in time for directors to give them proper consideration?

Let's face it, some board members do leave their preparation to the last minute.  They can get away with this if the raw material for the board meeting is typically a bunch of static financial reports and detailed operational reports prepared primarily for management purposes.  At a pinch these can be skimmed over during a meeting without too many people noticing.  If, on the other hand, board papers are of substance an inadequately prepared board member will quickly become exposed.  Effective boards typically engage in intelligent discourse which demands the timely delivery of the sort of board papers that will require prior thought and reflection.

7.  Do your board members have the capability of being strategic?

When most of your board members are only interested in how the organisation goes about its business, it is always going to be very difficult to have strategic-type board meetings.  Not everyone is cut out for, or interested in, the conceptual and sometimes abstract nature of a board-level strategic dialogue.  To address this issue, an increasing number of boards have been looking to change the way their board is selected.  Their aim is to ensure that at least some of their directors are appointed or elected on the basis of their ability to provide the type of intellectual and principled leadership which is at the heart of effective governance.

8.  Does your board to review its performance and that of its individual members?

Every board needs to have an effective performance feedback mechanism.  The most common way of achieving this is an annual board and director effectiveness review process.  There are many different ways of conducting such a process which we may explore in a future article.  In this context it is enough to note that excuses for not adopting such a discipline are becoming fewer and weaker!  Stakeholders’ expectations of board performance grow by the year.  Even the boards of not-for-profits comprised of volunteers are expected to perform their governance function with at least a degree of competence if not distinction.

 

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