|Wed Apr 22 21:00:23 +0300 2015|
Have you felt that the board meetings are nothing but waste of time? That you are not really contributing there? That most of the meetings should not even be summoned? If your answers are no, don’t bother reading further.
Many of you have spent hundreds of hours at senseless meetings, all organised with good reason, for example required by law or company policy. The meetings are costly – just count the expensive man-hours spent for preparing and attending. This time is not spent on doing things that make sense. Most of different board meetings I have attended have been like this and only rarely have I been in a position to improve things.
I would be happy to learn that this is my personal unfortunate experience and most of the boards of successful businesses and especially the boards of cool start-ups are run differently. I hope that many of them really are. I think there is more chance for a board to be able to add value in case it is formed according to the American legal tradition where CEO is board member and typically the chairman. The board that is run in practice and legally by the CEO and consists of members invited by him/herself has a chance to become a working group or even a team. People well selected and invited to join as advisors and partners for business decisions and adequately compensated for this might contribute.
Yes, they might, but there are conditions. If they know how to. And if the CEO knows how to use them or, to start with, at first even realises the importance of it. Unfortunately this is often not the case, like we can read or see almost every day. Serving at a board is a complicated thing and the ability to run a board with all the dynamics of personal relationships, different professional backgrounds and no real subordination is even more complex task than leadership of the management team. It’s interesting that during my nearly 30 years’ practice as an executive search consultant and coach I have almost never asked to find a board member or to coach a board to become more productive. Knowing the reality I can only attribute the reason to chronic underestimation of the board’s role.
Two levels of governance, like in Estonian (and German) legal tradition makes things even worse. Shareholders appoint the supervisory board that appoints the CEO and management board. The CEO is typically participating and preparing the board meetings, without formally being a member. Board roles are often talked about like “seats”. That’s the way members tend to perceive their responsibility – just showing up and sitting through the meetings where management informs and reports. Typically there is no real preparation – except by the CEO and his assistants, no creativity, no challenging discussions. No making of real decisions. Approvals – yes, of course. The budget has to be approved as well as annual report. It gets interesting just once a year, when board has to decide the annual bonus of the CEO.