In this week’s blog, we discuss the importance of healthy board dynamics to increase the effectiveness of the decision-making process and create an enjoyable environment in which individual board members thrive.
Written by Elise Perraud.
What do we mean by board dynamics and why this is important?
Board dynamics are the way individual company directors interact with each other during board meetings i.e. how they speak to each other, how they express their ideas and debates them, how they reach conclusions. Board dynamics are healthy when:
- ideas are debated robustly, in a constructive way and respectfully;
- all board members have an opportunity to speak and express themselves;
- relationships between board members are strong.
Healthy board dynamics increase board effectiveness, facilitate collaborative decision-making and generate value for stakeholders.
The NEDonBoard 1-day course How do you become an Effective NED on Board includes a session led by an experienced NED and chair discussing why board dynamics are essential, how they can be improved and how a recently appointed NED can position him/herself. For more information, please e-mail [email protected].
How can healthy board dynamics be created?
While individual board members bring their experience, skills and expertise, they need to operate and take decision as a team. This is why emotional intelligence is essential to be an effective NED, even more to be an effective board and committee chair. NEDs and board members need an independent mindset in a collaborative environment. To create healthy board dynamics, NEDonBoard recommends the following actions:
- NEDs should be carefully selected. They should be aligned with the organisation’s mission, purpose and culture. This is why it is paramount to use a variety of sources to recruit NEDs and go beyond existing NEDs’ own circles and networks. NEDonBoard offers its jobs board to advertise NED vacancies, which allows for a broad range of talents to apply to NED roles on offer.
- Attention should be taken to the board chemistry. Individuals may be aligned with the mission but they should also be a good fit for the board considering existing board members (unless relationships are expected to be terminated). This is one of the core functions of the Nominations Committee.
Related post: NEDonBoard Board Best Practice®: Succession Planning.
- The role of the chair is essential in ensuring healthy board dynamics. The chair of the board should score very high when it comes to leadership and emotional intelligence.
- Board offsites are an excellent opportunity to build team spirit and favor the creation of strong relationships between NEDs and board members. Examples may include: strategy offsite, training sessions, team coaching exercises.
- NEDs should be encouraged to meet outside board meetings.
How to assess if board dynamics are healthy?
They are a few ways in which boards can assess their dynamics.
- Self-assessment exercises are considered good practices. Frequency is typically annual. Both the board and its individual members should be subject to self-assessment, including the chair. Boards may then use collative feedback to form a picture of the health of the board’s relationships.
- Periodically, it is also best practice to commission a board evaluator to assist in assessing the health of the board dynamics and benchmarking them against other comparable organisations in terms of size, industry and complexity. Acting on the findings of the board evaluation may require leadership and potentially courage if conclusions do not point to effective decision-making or healthy board dynamics. Companies interested in board evaluation should contact NEDonBoard at [email protected].
The NEDonBoard 1-day training course “How do you become an effective NED on Board: the non-executive role” discusses in detail the importance of healthy board dynamics for board effectiveness. For information about the 1-day course, please contact us at [email protected].
Through its membership, events and training, NEDonBoard offers the opportunity for NEDs and board members to remain up to date with boardroom trends and development and brings to you the expertise of experienced NEDs and chairs. NEDonBoard promotes the effective operation of boards and healthy board dynamics are a component of board effectiveness.
Not a member yet, join NEDonBoard, the UK professional body for NEDs and board members today. Please visit our website: https://www.nedonboard.com/become-a-member/. We look forward to welcoming you.