The Benefit of Board Evaluations – Sharon Constançon

Sharon Constançon is Chief Executive of board evaluations and effectiveness company, Genius Methods; Chief Executive of VALUFIN, a foreign exchange risk management company; Chairman of the South African Chamber of Commerce; and a committee member of the CISI International Committee. Speaking at a recent NEDonBoard panel event, we asked Sharon a couple of questions about characteristics of an effective board.

What is likely to go wrong in a boardroom?

I think what goes wrong starts with the Chairman.

Typically, chairmanship – [poor] leading and controlling and orchestrating of a meeting – is where chairmen fall. As a result of that, the rest starts to dissipate and gets worse as a result of not having a very good chairman style. I think if that can be an area that boards were to focus on, you would see things going right more quickly and more easily.

What is your solution to improve board effectiveness?

Trying to get board members to recognise the impact of their own behaviour on those around them, understanding what it means to challenge and debate rather than instruct, and to work out how to understand the biggest strategic agenda in their conversations. If they can do those three things, all I’ve done is ask them to behave a little differently and we see a huge change in board effectiveness.

Has the market for board reviews matured?

Hugely. There’s been a major change since the Walker Review which was 2009….A massive change – and the appetite and the acceptance of it has improved. Nobody wants a board evaluation, no chairman wants to be criticised or to be told there are some improvements that they could consider so generally people are still reluctant. But the marketplace in terms of the providers have matured and the receptiveness of boards to actually go down the journey of a board evaluation in an effective manner has improved.

How do CEO’s typically integrate with their boards?

Badly, is probably my first answer to that, and something that we’re working a lot to improve [this].

You’ve got a circumstance where they [the CEO] see [the NED] as the enemy; they don’t see them as being the trusted colleague. And if you think about it, NEDs and the CEO have actually the identical goal in mind. They are your best friend; they’re a logical place to turn to. It’s a lot of work to educate CEOs to actually seeing the value that the board’s directors can bring. They’re the cheapest resource of intelligence you could wish for. Use it. So that’s what we feel doesn’t work the best it could.

How can chairmen improve the value boards bring to an organisation?  

I think the most important [thing] is to focus on the strategic agenda, making sure that they talk about the right things. Ensure they ask for information on the right things so that the conversation stays at a strategic level and not at an operational level. I think it’s very important that chairmen ensure that the board holds the executive to account and that they are very mindful of the risk agenda.

So, if I were to look at [these] things I would say that is where the chairman can make the biggest difference, and that in turn would bring huge value to the executive.

Sharon is a course leader for NEDonBoard’s How to Become an Effective Non-Executive Director 1 day course.

 

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