To function effectively your board needs the right structure, adequate support and development opportunities for the directors.
The role of the board is defined in the UK Corporate Governance Code as being to:
- provide entrepreneurial leadership;
- set strategy;
- ensure the human and financial resources are available to achieve objectives;
- review management performance;
- define the company’s values and standards;
- ensure that obligations to shareholders and other stakeholders are understood and met.
Arguably, the most important position on the board is that of chair. The chair leads the board, sets its agenda and ensures it is an effective working group at the head of the company. He/she must promote a culture of openness and debate and is responsible for effective communication with stakeholders. The chair is ultimately responsible for ensuring that all board members receive accurate, timely and clear information. In addition, the chair should ensure there is a good working relationship between the executive and non-executive directors and sufficient time to discuss strategic issues.
Bridgehouse Company Secretaries provides a range of board meeting support services that ensure your board works together effectively including help with strategy, board training and personal development and a variety of company secretarial services. Talk to us to find out more.
Board and committee meeting management+
At Bridgehouse we understand how vital good meeting management is to the running of an effective meeting. Leave the board meeting agenda, paperwork and legalities to us so you can focus on running your business.
Outsiders rarely appreciate the amount of paperwork a single meeting can generate. But because it is what we do, day in and day out, we can assist with making sure your board and committee meetings run smoothly, using tried and tested techniques such as meeting plans and taking accurate minutes of board meetings.→ find out more
Just like employees, board members need inductions, job specifications, regular appraisals and training to perform to the best of their ability. Succession plans should be put in place to ensure a smooth transition and ensure there is never a vacuum at the top.
The recruitment process for board members should be open and transparent. Job specifications should include a list of competencies and each board member should undergo an annual performance appraisal. All appraisals should be qualitatively assessed to ensure objectivity and impartiality.
The collective performance of the board should also be reviewed, preferably by an independent expert, to evaluate how effectively the board leads the organisation. The process should lead to development and training plans for individual members and the board as a whole.→ find out more
Non-executive directors (NEDs) play an important role on boards that includes:
- constructive challenge and help in developing proposals on strategy;
- scrutiny of management’s performance in meeting agreed goals and objectives and the monitoring of performance reports;
- satisfying themselves on the integrity of financial information and that controls and risk management systems are robust and defensible;
- determining appropriate levels of remuneration for executive directors;
- appointing and removing executive directors, and succession planning.
The Walker Report, published following a review of governance in the UK banking industry, emphasised the ‘constructive challenge’ part of the NED’s job, in light of the perceived unwillingness of bank directors to question a dominant chief executive.
The board has more influence than any other group of people on the success – or failure – of your organisation. It determines strategy, is responsible for ensuring the organisation is properly run and, ultimately, has responsibility for its results. A balanced board composition is vital. The board should produce a statement covering the ratio of executive and non-executive directors, the combination of skills required, gender and racial mix and whether stakeholder representation is needed.
But is your board achieving its full potential? Do members have the right skills? Are they given training and adequate support?