As a one-time customer of Yahoo!, I was staggered to learn that the biggest data breach in history occurred three years after 500 million to one billion Yahoo! customers had their information stolen. How could the company justify the delay in notification? What role did the board have in deciding when to communicate with customers, investors, and the community?
As a member of a variety of boards, it gave me pause. It reminded me of the often misunderstood role of board members, and how important it is that they work continuously to improve. Board expert Kylie Hammond says that members have an obligation to ensure their performance is “up to scratch.”
Consider the leaders you admire in work and life. They are not great leaders by accident; they’ve worked hard, and have intentionally pursued a path of growth. Board members are leaders too, and like all good leaders, must continually improve in their roles.
I’ve observed a few essential qualities that can make or break a board’s effectiveness. These qualities are critical to steer an enterprise in the right direction, and even more critical for navigating when things go wrong. Whatever the situation, board members (and leaders at every stage in their careers) will become more effective when they practice the following habits:
1. Cultivate a Culture of Respect and Humility.
Anyone on the board can lead with these qualities. Your authority does not come from having a high position in some hierarchy, or from your previous successes. Your authority comes from who you are as a person. Boards operate better when there is authentic humility. It’s a joy to work with board colleagues who are not impressed with themselves!
Many years ago, I served with a group of investors where a few strong personalities constantly competed to prove who was smarter. It was a distraction that had to be managed by a stronger leader, who eventually pulled the members aside to set them straight.
Some board members have the opposite problem. For the sake of peace and collegiality, they don’t confront when it’s needed. They may believe that gentleness and humility mean giving way in every situation. One of the hardest aspects of leadership is knowing the right moment for confrontation. To that end:
2. Fearlessly Ask Questions and Challenge Assumptions.
Interrogate reality. Ask the questions that help the board and management understand what’s really going on.
One of my favorite authors, Susan Scott of Fierce Communications, writes:
“When it comes to profitability, keeping our businesses healthy and growing, we must determine whether the assumptions on which our organization was built and is being run match current reality.”
Leave no assumption off the table, including assumptions about:
- The organization’s strengths and weaknesses
Good board members ask these questions with the goal of enriching relationships, not accusing others of sub-par performance. Failure to confront and ask difficult questions is in itself a decision with consequences. Conflict and confrontation are never easy, but wisely applied, they are a necessary part of courageous leadership.
One of my favorite quotes on this topic is from ancient Roman leader Marcus Aurelius:
“The first thing is to keep an untroubled spirit, the second is to look things in the face and know them for what they are.”
3. Remain Actively Engaged.
Those of us who have served on boards know that far too often, members don’t arrive prepared. You owe it to all of the stakeholders–from employees to management, and from customers to investors–to do your homework!
Once a senior executive began a board meeting by saying, “In case you haven’t reviewed the materials…” He was right to assume that few members prepared in advance. But that should be the exception, not the rule.
To be completely honest, when I served on my first few nonprofit boards, I was one of those unprepared members! Much of the material was foreign to me, because it was from a highly specialized sector – healthcare. The CEO and Chairman of the Board had not invited me to serve for my expertise in healthcare, but for my experiences in technology and entrepreneurship. There was a lot of catching up to do, and I realized later that there were many options to overcome a lack of understanding of the industry.
Going to industry meetings and asking the advice of experts should have been my top priority. Over time, I’ve realized that it’s a good idea to ask questions at board meetings. If you have a question, someone else usually does, too. Board members should dig deeper.
Recently, I chaired a working group to determine objectives and parameters for the board’s continuing education in the aviation industry. A key part of our discovery was to ask the management, who had over 100 years of combined experience in the field, to make recommendations on conferences, webinars, and workshops that would be valuable to our directors.
Before each meeting, write down at least a few questions. Questions kickstart the imagination.
Entrepreneur and investor Bryan Stolle offers good advice to board members on greater engagement:
“….you need and deserve an engaged board member who is always motivated to look out for the company’s best interests and actively promotes those interests at all times. Being a great board member means being an active evangelist in the ecosystem, sharing your network, and keeping your eyes peeled for opportunities when you can best promote the company. It also means being actively engaged.“
Practice these qualities, and you and your boards will see better results in any environment!