On and off the Board of Directors’ agenda

There are fixed items on the board’s agenda that you cannot do without, for example agenda items covering continuing obligations emerging from regulatory or listing requirements, besides other fixtures such as quarterly management accounts and new business development.

There are however other items that go on and off the board agenda, but which are of great significance and consequence to the business, and to which board directors have clear responsibility. Let us consider a few.

How much time do directors spend on evaluating the CEO’s performance?Are the director’s satisfied with the CEO’s performance and is the person who the board recruited a few years ago still the ideal match with the profile of CEO at the stage that the business is in today or expected to be in the future?

How much time does the board spend on discussing succession planning? Consider the case of a CEO being metaphorically run over by a bus and does not turn up for work tomorrow, what comes next?

How much does the board spend time in evaluating the performance of the CFO, always the second most important position in the company? What about the CFO? Is this person the CFO the business needs today? Do we need a Controller, a predominantly Compliance person, or a commercially minded CFO who can think strategically and be strongly commercially-minded? Its difficult to find a “man for all seasons”. Do we need a change?

Who do we consider to be the members of our senior management?Are these the key players in the business? Are their skills, competences and experience compatible? Does someone stick out like a sore thumb? Is there full understanding of our business’ strategy and are they all heading in the same direction?

The width and depth of this discussion depends on the quality of the independent directors on the board. How strong is the voice of the independent directors?Much depends on their skills and experience but also on their forcefulness, constructive diplomacy and respect. A lot depends on how much time the Chairman of the board allocates to such items on the agenda, or to whether there is enough “executive time” (without the presence of executives and even executive directors) for an open and frank discussion amongst the independent directors.

Do the executive board members listen attentively to what the independent directors have to say? Consider this when you are next evaluating your board’s performance and effectiveness.

About the author(s)

Joseph F.X. Zahra is a Malta based economist with over thirty five years of corporate leadership and business consultancy experience.