We were pleased, therefore, to read a recent piece published on-line by The Harvard Business Review (April 28, 2021). In 10 Proactive Questions Every Board Member Should Be Asking, Andrew White, Tazim Essani, and Eric Wilkinson acknowledged that directors have responsibility for a company but only limited means to really understand it. Also, the understanding they do have is often mediated by management.
Unquestionably, many boards are vulnerable to being little more than passive recipients of management-provided agenda content. However, White et al. contend that “…board members can play a transformational role by asking questions that create a space for deep reflection and strategic change…”. To that end they propose ten questions that can help boards change from passive to active, and from reactive to transformational.
- If you designed the agenda, what would be on it? Having the board—not executives—determine what it will work on, is a critical part of leading and being proactive.
- What is the executive not telling you that you feel you need to know? This is mainly for directors to discuss with each other but, as the authors point out, it is critical to create an environment in which executives feel comfortable speaking up. A useful suggestion we noted was to have topics on the board agenda framed as open questions. This reinforces some of the notions outlined elsewhere in this issue of Good Governance (#75).
- How is the external world changing in ways that are not reflected in your board conversations? Boards become progressively internally focused for many reasons. Ensure that the board’s membership is regularly refreshed and create opportunities for stimulation via, for example, guest speakers who will challenge the board’s assumptions.
- What don’t you know about the company that you’re most concerned about? The authors note that this question (and the previous ones) require some dedicated board thinking time. This links back to Question 1 and also relates directly to the board’s ability to ‘enquire’, explored in the lead article in this issue of Good Governance – Is Your Board’s Head Out of the Boat? It also points to the need for an organisational culture in which people feel empowered to speak up about problems.
- What do you see always being discussed but never resolved? Look back over previous board meetings and notice the issues that come up over and over again without being satisfactorily cleared up. Start conversations to try and understand what’s going on.
- What are you not discussing that you need to talk about? Is the board spending enough time on the things that really matter? Boards are easily bogged down in ‘business as usual’ and in matters that are urgent rather than important. This question is also about agenda setting. It is easy to let routine matters crowd out discussion of issues that may be difficult and uncomfortable.
- Are we addressing all the stakeholders, not just the shareholders? If so, how, and what’s the order of priority? This is about bringing corporate purpose to the front of the board’s thinking. Why does the organisation exist, and for whom? This conversation draws attention to the myriad of other stakeholders who make essential contributions to an organisation’s success.
- Are we adequately discussing longer-term issues, both internal and external? This question acknowledges the tendency for boards to focus too much on the short term particularly during times of crisis or extreme change such as the pandemic.
- How well do we know and trust each other? If board members are to work together to achieve a common goal rather than simply turn up as a loose collection of individuals, they need to know and trust each other. In the absence of trust, important and relevant conversations are almost impossible.
- How would we describe the organisation’s culture? Would we all describe it the same way, and is the culture consistent across the company? Culture is difficult to define but many corporate failures of recent years have come from a negative culture misaligned with corporate purpose and espoused values. The authors suggest that it is essential for boards to get an accurate readout of organisational culture and, where changes are necessary, support the executive in bringing them about.
Regardless of the specific questions, the key is to have an open mind and be curious. Then establish the conditions that will support the board to ask and answer the kind of questions that will help it understand the context, risks, challenges, and opportunities facing the organisation they are governing.
In many ways, however, the strongest message of this article is that to be effective, a board must have a very clear idea about what should (and should not) be on its agenda.
- Richard P Chait, Thomas P Holland, and Barbara E Taylor (1996). Improving the Performance of Governing Boards. Phoenix. American Council on Education/Oryx Press. p.1