Board Effectiveness

Boards of Directors are most effective when they have four elements in place: alignment around strategy, clarity about team role, the right balance of behaviours and the right mix of capabilities.

However, unlike an Executive team, a Board is deliberately non-homogenous, with different stakeholder representation, requiring independent thinking and challenge.

As well as developing individual skills to deliver the strategy, a crucial part of board development is building the capability to allow diversity of opinion to be channelled constructively.

Our Approach to Board Effectiveness

Our board practice has extensive experience in both board evaluation and board development.

Independent Board Evaluation

OE Cam’s board evaluation audit identifies compliance with governance codes and company articles. We examine the internal governance processes, schemes of delegation and actual practice. We assess the independence of Non-Executive Directors and their engagement with the business.

Whilst board role, process, structure and specification are important and necessary, on their own they are not sufficient elements of effectiveness. We believe that the greatest contributor to board effectiveness is its behaviour, team dynamic and capability. This is the key differentiator in our board evaluation methodology.

In our experience, the Board–Executive interaction can be improved significantly by building an understanding of, and improving performance around, six perspectives:

  1. Power – understanding the powers that the Board has and the extent to which the Executives are influenced by Board power
  2. Challenge and support – provided by the Board, and getting the balance right
  3. Trust – and the quality of ‘informal’ as well as ‘formal’ relationships between the Board and Executives
  4. Materiality – Data sets used and the opportunity for the Board to come to a view
  5. Risk – perceptions of, and appetite for, risk
  6. Judgement – and how it is brought to bear on strategy, performance, risk and behaviour.

A core part of our approach is to transfer this understanding to the client and we work hard to ‘take people with us’ so key stakeholders are more engaged in the change.

We design the scope and rigour of evaluation to meet the individual context of each board. For some, a questionnaire may be sufficient; for others a deeper review of constitutional practices and behaviour is required.

 

Board development

Outputs from a board evaluation skills & experience questionnaire along with insights from one-to-one interviews and meeting observations are invaluable inputs to inform an overall board development plan.

As experts in behavioural change, we use psychological insight to deliver board development through:

We work with clients to create a common vision of the purpose of the board, its roles and how it interfaces with the Executive. As well as collective coaching and development, we also coach individual directors in how to deliver the non-executive role, by providing external challenge and being a sounding-board for tackling specific issues.

What’s Involved?

Every project is bespoke, however both board evaluation and board development typically include the following aspects:

  • Stakeholder engagement – crucial to gain collective buy-in to the process
  • Diagnostics / research – understand what’s working well and what needs to improve at individual and team level. This is often through psychometrics, skills questionnaire, review of board papers, previous board evaluation reports and one-to-one interviews
  • Observation – attend board/committee meeting(s) to assess board behaviours first-hand. We assess behaviours against a pre-defined set of criteria regarding direction, oversight and quality of Board member relationships (re: challenge and support)
  • Feedback & analysis – one-to-one meetings to give feedback on individual strengths and development priorities. We report back key collective themes to Chair/CEO and work with them to co-design a development programme
  • Tailored individual and team development programme which could include:
    • Individual coaching
    • Team workshop modules (incl. key speakers, role playing with actors, business simulation, offsite away day)
  • Pre and post-programme evaluation to demonstrate value and benefits of improved performance.

Why do I need board effectiveness?

Many boards have adopted the practice of an external review every two or three years with the Chair conducting an internal review in the intervening years.

Our extensive experience coupled with our imaginative approach allows us to bring external best practice, impartial challenge and constructive development to board excellence.

Why OE Cam?

As specialists in organisation behaviour, OE Cam goes beyond the formal requirements of corporate governance and legislation by applying psychological insight to enhance board behaviour and relationship dynamics. This means that we understand the blockers to performance improvement and can identify the most effective methods for individuals and teams to move forward.

To learn more about our Board Effectiveness services, please contact Mark Goodridge at mark.goodridge@oecam.com or phone our Cambridge office on +44 (0)1223 269009.
We welcome all enquiries.