Over the years, I have attended many board meetings both efficient and not so efficient.
The principal reason for the differences in efficiency has been the actions of the board chair. For a board meeting to be effective, the chair needs to contribute to the meeting by challenging management and welcoming other directors to challenge both management and the board chair.
The chair must not lose sight of the fact that he or she has the responsibility to guide the meetings as well as participate in them. And to be effective, the chair needs to ensure that all directors are prepared.
Directors who fail to prepare for board meetings are a growing problem, according to PwC’s 2016 corporate directors survey. The portion of board members surveyed who said underperforming directors are unprepared for meetings climbed to 25% in 2016, up from 11% in 2012. And with challenging topics such as cybersecurity risks on agendas, pre-meeting preparation materials are taking more time to review in many cases.
There are many ways for the board chair to ensure directors prepare properly for board meetings. Before the meeting, the chair can ask each director: “What are you hoping to achieve from the meeting?” At the meeting, the chair also can ask directors if they have read the pre-meeting materials that they have been sent. An early item on the agenda, meanwhile, can be to ask for the record whether everyone has read those materials.
Another good practice to enable efficiency is to ask the directors to give written reports before the meeting. They can include an executive summary of two or three paragraphs at the beginning of their reports. This way, the important points are identified, and the details that other directors may wish to comment on also are reported.
The chair isn’t solely responsible for ensuring meetings are effective and efficient, however. Although the chair’s actions are important, I act as a nonexecutive director and company secretary, and I am often surprised how I (and other directors) can help the chair.
Identifying the chair’s favourite topic is helpful, because the other directors may want to act to make sure the board avoids spending too much attention and time on that topic. I have worked with chairs who are very technical and the meeting can be turned into a technical debate. Former finance directors can be the worst, with detailed explanations of the debits and credits.
When board meetings go off on tangents, the secretary can help restore order and get the meeting back on track by asking if the topic should be noted. The point then can be taken outside the meeting and reported back at the following meeting, saving the board from spending valuable time while directors debate an off-topic question.
Nigel Davies is a Wales-based accountant who serves as a nonexecutive director for Thomas Carroll Group PLC and as a member of council for the Chartered Institute of Management Accountants.