10 Questions to Ask at Your Next Board Meeting

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Published in "The Director" magazine, April 2009

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  • 1. A AGENDA 10 Questions For Boards by Roger Branch MANY company board meetings fall into a predictable pat- 5. Do we keep the CEO? Consider whether, if the current CEO tern of procedure-driven activity, with excessive time given towere applying for the job today, you would hire them. You reports from the audit, compensation, transactions, and otherwant a chief executive (and management team) that is geared committees. Even in todays Sarbanes-Oxley and liquidity-to where the business aspires to be in three years, not where focused business climate, boards often make the mistake of fo- it is today. Answering this question forces you to decide if you cusing too much on governance and not enough on strategy.should re the CEO or pay them a bonus. This question has The 10 questions below are designed to help you energise extra relevance for a founder CEO. your next board meeting and focus on the strategic issues that 6. How do we move faster? To achieve asymmetric growth, com- are vital to driving the best possible long-term performance.panies need to have a high tolerance for momentum despite the They are divided into two groups three governance related, discomfort. You need to identify the impediments to growth and and seven strategically related. While a one-size-ts-all solu-remove them. Acceleration needs to become a core competency. tion does not apply to all boards, using these questions should7. Why? (To any proposal.) For any proposal, whether coming help you to focus your board meeting on the things that really from the board or management, keep asking why? until you matter so that the board is truly adding value.get to an answer that satises the ultimate needs of your keystakeholders. For example We will launch a new marketing GOVERNANCE QUESTIONS campaign. Why? To drive the new product launch. Why? To 1. What is the dashboard telling us? The dashboard shouldincrease revenue in Q3. Why? To support a higher valuation. provide you with key nancial and stakeholder metrics so thatWhy? To enable acquisition funding. Why? To increase mar- you have the key health and trend measures for the businessket share. Why? To gain long-term competitive advantage. from the angle of customer, employee, investor, and other keyWhy? To drive superior shareholder returns. stakeholders. You need to make sure that you have good data, 8. How? (To any proposal.) Likewise for any proposal, keep ask- unltered by management, so youre not making ungrounded ing how until you get down to the level of granularity required assumptions or decisions based on faulty premises. Considerso that all the involved parties know specically what to do to a balanced scorecard approach so youre not focused solely onimplement the proposed change. For example We will focus the numbers. on increasing revenue in Q3. How? We will launch the new 2. Do we have smoke detectors in place? Part of good govern- product and unveil our new marketing campaign. How? We ance is preventing major problems. It is well worth a regularwill hire two new sales reps, target accounts in the northern review to determine that your early warning systems are in region, and utilise direct mail and radio advertising. How? place for key issues such as liquidity, product and legal liabil-We will . ity, ethical violations, information security, development and 9. What should we stop/start/change? Based on analysis of the project risks, and people risks. dashboard data, an understanding of important market changes, 3. Do we have the right board composition? The board shouldand an assessment of proposals and competing ideas, you should ask itself if it has the right composition of skills and knowledge be able to identify the key changes needed to drive the business. for where the company aspires to be in three years. Theres no Focus on no more than three major initiatives at a time. substitute for the been there done that factor, when it comes10. How is our balance? Allen Procter, former CFO of Harvard to acquisitions, offshore expansion, funding, or anything else.University, says that the core question board members shouldbe asking is if there is the right balance between mission STRATEGIC QUESTIONSenhancement versus mission sustainability? Operate within 4. Whats changed since our last meeting? While you dont need your narrow zone of mission comfort and you become a victimthe director to perform a full-blown SWOT analysis at each meeting, itsand your mission will fail. Grow too much beyond your core crucial to recalibrate, especially around changes in competi-competence and you jeopardise your core mission. tion, economic factors, customer preferences, and technology, and how these changes affect the business. Roger Branch is associate director of executive search rm Kinross Partners.72 April 2009

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