Preparing for the Board Meeting

Imagine you have been part of a high profile diversity campaign that seeks to improve recruitment processes and highlights the failings of the board. The board is susceptible to groupthink. They are all from a particular background or if not, they have served together for a long time and could therefore lack independence of judgement. Your arrival on the board has you billed as the saviour, fresh blood and a new pair of eyes. No pressure then!

The board meeting begins and the usual formalities consisting of apologies, approving the minutes and checking matters arising have been completed. The first item on the agenda is the report from the CEO which covers a number of strategic areas of the business and triggers some debate and discussion. You haven’t felt the need to comment until now but there is a point you want to make. You raise your hand trying to get the attention of the Chair, he notices you and it’s time to make your contribution.

It’s as though the whole board are waiting to hear what you have to say. There is an uneasy silence while they anticipate what you will say. The board wonder what advice this ‘*new’ board member will bring (*new refers to an addition to the board who may be younger, of a different ethnic background or gender to the existing board members. When referring to ‘new’ board members here, this could also include tenant members on a housing board or parent governors on a school governing body). The *new board member makes a comment, which is sound, valid and contributes to the agenda item being discussed. People nodded, but it appeared to be more to hurry on what the *new board member was saying rather than in agreement. At least the *new board member had broken their silence. They had attended and contributed to their first board meeting.

Usually, the comments from the ‘*new’ board member are invited at a certain points in a meeting, you become the expert in the group that you are representing but do they understand that your role is much broader than that? Added to this, your contribution is solicited often when all of the decisions have already been made.

In reality, of course board meetings are not that polarised for new members but you can feel some of the pressures to perform as described. This month I want to share with you some questions that you can use to help you better your performance in the boardroom.

 

1. First of all, ensure that you have done your reasonableness check. What are the key indicators that you should know? Rehearse them. I often say there is no such thing as a stupid question but unfortunately, there can be! If you don’t read your papers or learn the basic facts about what the organisation does, you may just ask a stupid question. Once you have done that then there is no such thing as a stupid question.
2. Next, remind yourself of the key corporate objectives and key risks that the organisation faces. Being aware of both the risks and the objectives will ensure that any decisions made aim to fulfil the objectives whilst protecting the organisation from associated risks.
3. Review the previous minutes. This will help to identify contentious issues and areas that you need to keep under consideration throughout the meeting. Here, questions should be encouraged in order to ensure board members understand the decisions the board are making and why. While a review is important, an appropriate amount of time should be allocated to this task so that other items can be given due attention.
4. Next please find a database of questions that you can use at board meetings in order ensure your contributions add value.

 

Budget

What was the process in pulling together the budget? Was there a reasonable amount of diligence?

Are assumptions reasonable and reliable?

How do budgets compare to benchmarking? Are all covenants satisfied?

What choices/options have been rejected in pulling together the budget?

Are the budgets in line with the strategic priorities?

 

Performance Indicators

What does this indicator help us to understand?

Does this indicator help me to carry out my role as a non-exec?

Are there too few or too many indicators to monitor the organisation?

How does this indicator compare to the previous period, other businesses in the sector or projections?

Are there indicators in line with strategic priorities?

What actions should management be taking as a result of this indicator?

What are the 3-6 key indicators to keep an eye on?

 

Balance Sheet

Is the value of the business growing?

How easily can we meet current liabilities?

Are we reliant on loans to grow the business?

Are we holding large amounts of cash?

 

Income and Expenditure

Does the service income cover costs (for housing)?

How do actuals compare with the budget?

Are overall management costs reasonable?

Are we complying with interest covenants?

 

Loans

How close are we to covenants?

What would cause a breach?

How sensitive are we to fluctuations?

Do we have adequate draw down facilities?

What is our treasury exposure?

 

Attending your first, or any board meeting can be a daunting prospect but being equipped to contribute to that meeting can make all the difference. If you are an established board member, it’s also important to welcome the comment and input of the *new board member. Their fresh perspective and ambassadorial views (views that represent the group – young people, tenant, parent etc.) are crucial in breaking the status quo of ‘business as usual’ and can help highlight gaps, risks and can help continue set the strategic vision of the company.

New board members and prepared board members make effective board meetings!

 

Until next time…