Part 2/3: communication and motivation
Communication within the board and with the management
Probably the most significant recommendation that real-world governance experts agree on with regard to boardroom dynamics is that boards need to have open, challenging interchange between directors and the CEO and among directors themselves. Boards that work well have constructive, critical dialogue among board members and senior management. Such open dialogue is the single best indication of board effectiveness. The balance of power and the long-term success of an organisation largely depend on a board independent enough to counsel, a chairman smart enough to listen, and a president strong enough to act. An effective director will think, speak, and act independently with confidence and courage. The board members have a need for an increased information flow not only on specified item related matters needing comments or opinions but on all on-going matters. The discussion needs between the board members themselves and the staff (especially the managing director) is evidently more desirable than expected. At the same time the one needs to give thorough consideration to the quality and amount of information emitted.
In order to be effective, the board must foster communication among its members between regular meetings and in order to ensure effectiveness of work a smaller executive committee should be elected. The lack of a well-functioning committee structure leads to failed performance. Although it is true that major decisions are made in board meetings, it is also true that most of the work that supports this decision-making occurs at the committee level. The executive committee plays a vital role in ensuring that this happens. To facilitate its work, the executive committee should meet on a regular basis. For example, if the board holds its regular meetings on a monthly (or in many cases only 2-3 times a year) basis, the executive committee might also meet each month in between the regular board meetings. In addition to that, the effectiveness of the whole board can be improved by the idea of over-sight responsibilities on expertise-based items.
Board members need to be correctly motivated and should internalize the feeling of responsibility rather than that of power.
Motivation of people still happens through Pavlovian carrot-and stick incentives. Let’s take an example from 2500 years ago: Athens gave its citizens a direct voice and an active role in civic governance. The city rose to an unprecedented political and economic power. The system succeeded in bringing individual initiative and common cause into harmony. The Athenian model does not provide a simple set of prescriptions for modern managers. It does, however, offer a window into how sizeable groups of people can successfully govern themselves with dignity and trust and without resorting into a stifling bureaucracy. Being able to contribute to the success of the whole industry is on most cases seen as the most important reason for a board membership.
The ethics of work motivation theory are important because motivational efforts can exert control over individual moral autonomy. Among other things, motivation usually involves the understanding of values that motivate individuals to work for organizational ends. In other words, factors that individual workers regard as valuable need to be channelled or redirected to augment organizational productivity. The phenomenon behind a high level of motivation is the sense of responsibility.
Several strategies that can be used to maintain and even increase commitment and performance and thus increase motivation:
- When building a board, align the interests and expectations of board members with the organization. Understand their interest and motivation in serving, and be sure that they understand the challenges and requirements of board service.
- Show appreciation often, in both formal and informal ways. Recognition of board members encourages commitment and high-performance.
- Involve board members in areas where they feel they can use their skills and knowledge and add real value. Make training opportunities available to increase their skills and knowledge.
- Institute an annual board self-evaluation program that allows members to step back and reflect on their own performance as well as that of the group. This can provide feedback on performance and help develop corrective actions.
- Develop individual accountability contracts. Use these contracts to determine strategies for holding board members accountable for attendance, contribution of expertise, willingness to make constructive comments during meetings, etc.
Sometimes a board is ineffective because it is simply too small. Considering the significant responsibilities of a board, it is easy to see why an adequate number of people are needed to do the work. Although it is difficult to specify an appropriate size for all boards, in general a board should range in number from eleven to twenty-one members. A board needs enough members to lead and form the core of the committees and share in the other work of the board. Sufficient numbers are also needed if the board is to reflect the desired diversity and assure that there are a range of viewpoints to spur innovation and creativity in planning and decision-making.
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