Traditionally, boards met once a month. In 2001, we reported a trend to hold fewer but longer board meetings. Is that still true? Since then, the additional expectations legislators and the courts have placed on boards have grown. Governance training and the promulgation of ‘best-practice’ thinking on board effectiveness is also widespread, making boards more aware of the ‘quality time’ they need to spend on the job.
While boards generally have become better at their job (both more effective and efficient) in the last 8-9 years, their workload has probably increased rather than reduced. It is timely, therefore, to review how often your board should meet.
1. What does the board need to get on top of?
Boards need to dedicate a significant portion of their meeting time to future-oriented discussions. Often referred to as board ‘quality time’, these address strategic issues, make key decisions, and set policy direction. However, accommodating this within traditional board meeting agendas can be a challenge.
Careful preparation of an annual agenda or board work plan will enable boards to identify the work needed. A board must discharge its critical monitoring and control responsibilities, make essential decisions and cover ‘direction-giving' topics. Careful scheduling and prioritisation are necessary to make the board's workload manageable. Prioritising will give a board a clear sense of whether or not it is committing enough time and whether it is meeting as frequently as it should.
Despite the most meticulous planning, a crisis can disrupt a board's schedule. For instance, when an organisation’s survival is directly challenged, the need for board intervention escalates, necessitating more frequent meetings. This underscores the importance of maintaining a flexible approach to board meeting scheduling.
2. What is the extent and scope of the board’s delegation?
An important consideration is how much a board can delegate its authority to make decisions. Well-considered strategic and policy frameworks safely guide others’ decisions without direct board involvement. These frameworks also provide an explicit and consistent basis for monitoring and evaluating how such delegations are used.
When it limits its delegations, a board may spend too much of its meeting time in decision-making mode. Arguably, boards should not make routine decisions that can be made by others within board policies but should concentrate on uncertain and novel situations. This is where the board’s collective wisdom (and collective responsibility) comes into its own.
3. How often (or at what intervals) is it relevant (and valuable) to check the organisation’s performance?
Compared to what the organisation is trying to achieve, what quality and quantity of information does a board need to satisfy itself that the organisation is on track? Because it is not ‘operating’ the business, a board will seldom need as much information or as often as its management team.
Financial reporting, in particular, is traditionally on a monthly cycle. However, a monthly review is not particularly meaningful in some organisational contexts. Several months of performance data are needed for an accurate or realistic picture of the organisation’s performance trends. So, it may be more relevant for a board to meet, say, quarterly. Performance could be thoroughly analysed within an existing schedule at every second or third board meeting. That would allow intervening meetings to be focused on strategic and policy issues and critical decisions.
This does not suggest that board members should not receive monthly financial and performance reports. And, if performance deteriorates, the board can bring forward its next scheduled ‘monitoring’ discussion or meet online, for example, to address emergent issues at short notice.
4. Are there considerations of cost and convenience?
Board meetings cost, and board members are typically very busy. Fewer meetings will save the organisation money and increase the chance of all board members being present. This should be a valid concern in any organisation dedicated to making the best possible use of its resources. However, if a board is functioning well, the time taken up by the board and the resources it consumes should be considered an investment rather than a cost. If a board is not adding value, it is a different story.
For directors, having fewer board meetings may increase the chance of attracting (and retaining) the type of directors needed on their boards.
Chief executives may also be keen to reduce the frequency of board meetings. They often experience monthly board meetings as being on a perpetual (and rather negative) treadmill. After preparing for or following up on a board meeting, they feel they have little time for anything else.
Supporting the board (and reporting to it) is a core component of any chief executive’s job, but costs are involved. These include not only the direct costs but also the opportunity cost of the chief executive (and other senior executives) taking time away from directing the operational side of the business.
5. How much confidence does the board have in management and the quality of reporting?
A board must be confident that its executive team is up to the job. It also needs to be convinced that it will receive monitoring information that is timely, accurate, and accessible.
A board needs proposals that are well thought-out, based on thorough analysis and clearly presented. These require a significant management focus from chief executives and their teams. When a board does not have sufficient confidence in these aspects of executive competence, it may feel compelled to meet more frequently than might otherwise be necessary.
6. How well developed is board teamwork?
When a board has several new members, it needs time to form an effective new unit. First, it should be about developing a shared sense of purpose and an agreed-upon approach to its operation. Meeting less often is only likely to be a valid choice in a stable organisation where executive (and board!) performance is already effective.
It would be nice to think that determining the frequency of board meetings could be formulaic. These six considerations mean, however, that the frequency of meetings is, unavoidably, a judgment call for each board to make.
It should not mindlessly default to tradition, to whatever suits the executive team or fits best with the reporting cycle. A board should regularly review its meeting frequency—perhaps as part of an annual self-assessment process. It should resolve to meet as often as it needs to and for the appropriate duration, guided by whatever is necessary to fulfil its responsibilities.
