2013

Issue 13

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BoardWorks International
Issue 13, 2013

Why Does Your Board Need An 'Annual Agenda'?

The time a board has for its members to meet face-to-face is arguably its scarcest resource. There are many pressures on that time and, consequently, a tendency to overload the agenda. As directors often complain this is made worse by trying to deal with ‘too much of the wrong stuff'. Many boards - even those with professional directors - are vulnerable to ‘bogging down' in short-term, day-to-day operational and management matters.

For many boards the challenge is finding the right balance between reviewing past performance and dealing with the future. Some boards find it easiest to just react to whatever is in the Chief Executive's report. As a result they end up focusing inside the organisation, donkey deep in executive management issues instead of paying close attention to their own job. This imbalance is further compounded if there is an over-concentration on reviewing financial and operational reports. Every board must check progress against targets, observe trends and try and understand what lessons can be learned from past efforts. It must be wary, though, of trying to steer by ‘looking in the rear vision mirror'.

Conducting a macro-analysis of time use

Like any other decision maker a board can only influence that which has not yet happened. Consequently, it needs a planning process to assist in prioritising its use of time in direction of future facing meeting content. Anything like the following time management grid, that helps to distinguish between matters that are important and those that are merely ‘urgent', will be useful. Most boards need to make a particular effort to ensure that less pressing, but nevertheless important, matters do not get ‘crowded out'.

 

Important and Urgent Important but Not Urgent
Not Important But Urgent Not Important and Not Urgent

 

Having the board do the analysis described in the notes (1) will trigger a series of useful conversations. For example, what is ‘important'? How much of what the board usually deals with is ‘urgent' but not really important? How much is neither important nor urgent?

Designing an annual agenda

A board work plan, often referred to as an annual agenda, is a particularly valuable tool. It will help a board to focus on those subjects and processes central to its ability to add value to organisational performance.

An annual agenda defines, and schedules ahead of time, the two primary categories of the board's work: the things it must do (usually because it is legally and contractually obliged to) and the things it should work on (because those will be the most useful).

The preparation of an annual agenda offers a number of benefits:

  1. It creates a consciousness (and conversation) about what is the best use of the board's time over an extended period.
  2. It is an explicit planning process that extends the board's thinking about what it needs to work on beyond the next meeting.
  3. It reduces the board's vulnerability to the usual pressure to react each meeting to whatever has just come up.
  4. It supports the board to shift the balance of its time towards matters that are important but not urgent (e.g. environmental monitoring, strategic thinking, policy-making, relationship-building, risk characterisation, etc). By scheduling these into a work plan and, in effect, creating a deadline, it generates a sense of urgency these matters would not otherwise have.
  5. It forces the board to be realistic about - and prioritise - the time it has available to properly consider key decisions and other matters of strategic significance.
  6. It allows unavoidable administrative and compliance type activities to be spread out over the year ensuring that these do not take up too much time at any one board meeting.
  7. It highlights the interrelationships between different matters that make it onto the prioritised list and schedules these for attention at the most appropriate time and in the most useful sequence.
  8. It signals to management ahead of time what preparation has to be done in order to support that board's deliberations on the matters that make it onto the annual agenda. If, for example, a board committee also needs to be involved in preparatory work, it is also forewarned and can plan its work accordingly. 
  9. It enables the whole board to be involved in thinking about what should occupy the board's attention. This whole of board involvement has a number of side benefits. For example:
    • Where the board meeting agenda has historically been prepared or unduly influenced by staff the board gains control over the content of its own meetings.
    • Where the chair has normally been the only board member involved in agenda setting it forces the rest of the board to share that responsibility.
    • Where board meetings tend to be hijacked by one or two board members determined to impose their latest preoccupations on their colleagues, the discipline of having reached prior agreement about the board's priorities makes it easier for others (not just the chair) to bring them back on task.

There is a range of ways to develop an annual agenda. The board chair, with input from the chief executive and board secretary, might put together an initial draft for discussion by the board. It is important, though, that the draft gets a thorough workover by the board and that the whole board ‘signs up' to the final version.

Alternatively, the whole board can start with a ‘blank sheet' and brainstorm the topics or issues it thinks it should be on top of by the end of the year. Because the board never has total discretion in its use of time this approach should be informed by prior identification of the ‘must do whether we want to or not' type tasks.

The idea of an ‘annual' agenda suggests the ideal planning period should be12-months but there is no reason not to adopt a longer time frame if this would be more useful.

Whatever the planning period, the scheduling of matters for the board's attention should reflect an appropriate balance between the need to ensure that the organisation is in compliance with statutory and contractual requirements (conformance) and that it is attending to those matters that relate to improving organisational performance.

Using an annual agenda

When completed and adopted the annual agenda lists the matters the board has agreed it will work on, meeting by meeting. It may have been decided, for example, that the board's July meeting will focus on an initial discussion of future partnering opportunities, a review of the stakeholder strategy and an interrogation of Q2 financial and performance data. Other scheduled board meetings will have their own unique agenda.

The annual agenda is used to drive the content and the structure of each board meeting. This means that successive board meeting agendas almost prepare themselves. Each meeting is planned around the topics on the annual agenda scheduled for that month. Annual agenda topics appear at the top of the agenda. Other matters that might also be attended to by the board at that meeting are, by definition of lesser importance, and are listed for attention later in the meeting.

Inevitably things will not always run so smoothly. It is important, therefore, to allow the chair some leeway in applying the annual agenda. For example, a consultation process to inform a proposal being prepared for the board by management may throw up some unexpected issues that need further exploration. As a result the planned focus for the board's May meeting will not be ready in time. Another important topic scheduled for later in the year can be brought forward to take its place.

Some flexibility will also be required because scheduling ahead of time in this way does not anticipate new and significant issues appearing that justify the board's attention. When this happens it is always a good idea for the chair to confirm with the board that emergent issues do, indeed, warrant attention because this may impact on the priorities set when the annual agenda was agreed.


Notes:

(1) The grid is used by asking each board member to separately assign a percentage to each cell based on their estimate of how the board generally experiences the use of its time in meetings. It is then a matter of ‘comparing notes' and agreeing on a general picture of time use. It will be rare that such an assessment does not conclude that there is too much time spent on matters that are unimportant (40-60% is not uncommon) and of the balance not nearly enough in the ‘important and not urgent' category.

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