Katy Tuncer, Joanne Roberts, contributing authors from Ecosystem Altruist event (July 2023)
Boards: too much delving, or just doomed?
Why the current focus on boards?
Ten “Ecosystem Altruists” gathered to consider boards at the Horizon37 and Harwell Innovation Campus/ ARCl summer event.
We challenged them: “Are some boards just doomed?”
Their conclusion: “Some boards, but very few.”
Whilst there are some situations when a board is so dysfunctional, that it’s not worth investing the effort in improving it, those situations are few and far between and subject to very specific criteria.
Floating this concept with an ‘Ecosystem Altruist group’ recently, there was a strong appetite and ambition about the opportunity to improve board performance with concerted effort, (which can include reassembling the board, and can include making a real effort to improve the performance of the existing board as it is currently composed), rather than nixing a dysfunctional board.
This article condenses their insight and ideas for the benefit of boards across the business scale-up ecosystem.
What should board members do to maximise the value of the board?
Back in 2020 when we completed our research project into ‘What really works on scaleup boards?’ we would have said it was worth investing in creating a valuable board in almost all cases. What we have always found in research and programme delivery, is that most board members, individually, very much want to be valuable. It’s working out how to contribute, and overcome the obstacles, to collaborate and become more than the sum of their parts.
Since then, we have seen some increasing dysfunction on boards. In fact when we curated a set of 5 leadership themes trashing business results during 2023, one of these themes was “increasing Board delving”. Specifically, we are seeing:
- Boards – especially investors, with their own challenges in the current environment – giving more prolific feedback and advice to the exec and staff. More often now, this is, erring on telling.
- Board members are making more demands for information (often uncoordinated requests from individuals as well) and justification by the exec team.
- How the relationship that develops between board and exec in the face of these challenges is variable, but typically we see less partnership and more “stakeholder management” in the exec team approach and attitude.
For us, this made even more acute the question of whether their actions are creating or destroying value in the business. And even more critical that board-exec relations are functional and efficient!
How do you strike the balance between report, challenge and scrutiny?
One of the most important levers to improve board performance and have it become as valuable as possible is to align on why the board even exists.
In our research we found that effective boards usually prioritise some mix of the following nine aspects of their role:
1. Choose the right strategy and plan
2. Stay on track with strategy and plans
3. Hit targets – performance and sustainability
4. Raise money
5. Don’t run out of cash (make well-informed burn-rate adjustments)
6. Create/maintain stakeholder trust
7. Attract talent and have the right executives in the right roles
8. Create a meritocratic and high-performing culture
9. Spot and avert crisis
=> ALL in order to maximise company value
The Ecosystem Altruists collectively compiled key actions which they considered as imperative to improve board performance. The actions take a collective view of board protocols and personal behaviours:
(From here on it’s about the performance of the board you HAVE):
1. Align on what we want to achieve/ roles
2. Identify our best roles
3. Deal with our triggers
4. Choose empowering identity for self
5. Be curious about others’ agendas
6. Get others to take roles that compliment mine/others
7. See beyond expressed behaviours in others
It is not enough to simply DO the key actions. Consider WHAT the board should actually do to achieve this? How much TIME and ENERGY does the ideal board allocate to each activity?
No correct answer, but a board needs to agree together how best to deploy time and energy for their particular business, with all board members committed to good practice – individually and collectively to maximise their value for the business.
To experience the full content from our ‘Valuable Boards’ workshops; get in touch to hear more and discover our programmes.
With thanks to our Ecosystem Altruists for their insights and candour for this co-authored article.