By Barry S. Bader
What does it take for a governing board to truly excel, adding tangible value to the organization through its work in the boardroom and its connections to key stakeholders?
Whether a board’s starting point is average performance or mediocrity, the journey to the top echelon of governance effectiveness cannot be achieved with a few quick steps. Board development is more like a marathon than a sprint. Similar to a marathon runner’s regimen, board development should be a long-term process requiring personal commitment, honing of critical skills, rigorous training and a disciplined plan to create a sustainable culture of outstanding governance.
Nonetheless, many trustees and CEOs – if they're honest with themselves – recognize that they are good but not great. For example, year after year, some board practices get the lowest scores in the annual governance surveys by the AHA and other organizations. Boards self-report that they trail their own aspirations when it comes to such practices as:
- Competency-based succession planning for future board leaders and board members.
- Keeping the board educated on changes in a complex, transforming health care system.
- Using the majority of board meeting time for forward-looking, strategic board discussions.
- Understanding and overseeing management of enterprise risks.
- Using the results of board self-assessments to make improvements.
- Evaluating individual trustees to help them improve and to base their re-appointment on performance.
A recent McKinsey survey of 25 large public companies found that board agendas “still spend the bulk of their time on quarterly reports, audit reviews, budgets, and compliance – 70 percent is not atypical – instead of on matters crucial to the future prosperity and direction of their business.” In other words, boards still spend too much time on retrospective review, not the sort of forward-looking work that optimizes the knowledge and experience of directors to advise management and make better informed board decisions.