“Good to Great” Governance Support: 2019 Areas for Focus

Jim Collins, the well-known author of the iconic management study Good to Great, uncovered the key to highly successful companies:

“There was no miracle moment. Instead, a down-to-earth, pragmatic, committed-to-excellence process—a framework—kept each company, its leaders, and its people on track for the long haul. In each case, it was the victory of steadfast discipline over the quick fixes.”1

The same holds true for what differentiates great governance from that which is merely “good.” And governance support professionals can and should be a key force driving this “steadfast discipline.”

While there are many potential changes in board structures or processes that could strengthen your organization’s governance, this article provides three key areas for focus in 2019:

• Intentionally increase the amount of board meeting time devoted to strategic discussions and policy.
• Maximize the effectiveness of your committees.
• Implement a more strategic, long-range plan for board recruiting.

Focus Area 1: More Time for Strategic Discussions/Less Reporting

According to The Governance Institute’s 2017 Biennial Survey of Hospital and Healthcare Systems,2 only an average of 24 percent of board meeting time is devoted to discussing strategic issues/policy—despite longstanding expert opinion that the board should be spending at least half of its meeting time on such discussions. Why is this? Because management/committee reports take up two-thirds of the meeting, crowding out more meaningful, generative discussions.

What can governance support professionals do to address this? We suggest the following:

• Reorder the board agenda to tee up strategic issues/topics early, followed by more routine discussions/reporting.
• Develop board leader/executive team consensus of what kind and how much pre-meeting material the board wants and needs. Ideas to increase the quality and reduce the quantity of information include:
  ›› Require a one-page-or-less executive summary at the outset of each report.
  ›› Caution! Although board portals are a wonderful tool, they make it all too easy for management to upload long, overly detailed reports that do not meet the needs of board members. To avoid misusing portals, consider a page limit on the total board packet. How? Once the board agenda is finalized, determine the maximum length of each component of background information and stick to it. The CEO must reinforce with his/her executive team the importance of concise, meaningful information to support policy-setting and oversight.
  ›› Develop a board-level dashboard that spans the board’s fiduciary responsibilities (e.g., quality/safety, patient experience, financial performance, compliance, community health, etc.). Then, use visual dashboard information rather than wordy descriptions of performance wherever possible; focus on addressing unfavorable performance not rehashing every indicator.
  ›› Keep committee minutes concise and clearly identify actions taken.
  ›› Distribute board materials at least a week in advance. Allow only rare exceptions.
  ›› Include “discussion questions” in pre-meeting materials for board members to consider in advance (and let them know they need to come prepared to discuss these).
• Ensure that the board chair sets a clear expectation that every board member will have read the board packet ahead of time, every time.
  ›› Reduce to an absolute minimum any management presentations of information provided in advance.
  ›› Encourage the board and/or governance committee chairs to counsel any member who regularly attends meetings unprepared.
• Convene executive leads of committees/senior managers to distinguish between the information needs of the board versus those of management— and to agree on a common approach/format for packaging and presenting information to the board and/or committees. Work collaboratively with the staff supporting these executives to ensure that they also are in the loop and consistently use common approaches.

Focus Area 2: Use Committees More Effectively

Board committees are the backbone of effective governance. Too often, there is variability not only in the effectiveness of individual committees but also in how each committee relates to the board as a whole. What can governance support professionals do to help make committee work more effective? We suggest the following:

• Require every committee to organize its work around a formal annual work plan directly tied to its charter responsibilities, using a common format/approach across committees.
• Require that each committee perform an annual self-assessment: reassessing its value to the board as a whole, updating its charter as needed, and identifying areas for improvement for the upcoming year.
• Assist the board and committee chairs in actively discouraging the replication of committees’ work at the board meeting. Provide these leaders with process tools to respectfully move the conversation forward while ensuring that concerns are addressed in a more appropriate forum (e.g., a one-on-one conversation between the board member and a committee chair or its executive lead).
• Avoid siloed behavior. At least quarterly, convene by phone the board chair, CEO, and committee chairs to share the work of their committees, agree on what is most important for the board to understand/discuss, and coordinate efforts across committees. Similarly, routinely convene the executive leads for all committees to share their approaches to committee effectiveness and the issues/topics they are bringing forth to their committees.
• Use a one-page reporting form to support five-minute verbal committee updates at the board meeting, when warranted.

Download Template:

› Five-Minute Committee Update

Focus Area 3: Plan Long Term for Future Recruitment Needs

All too often, the need to recruit new board members is identified only as a board member is rolling off. Recruiting the right people with the right backgrounds and competencies is essential for high performance and should be structured around a multiyear, intentional process.

What can governance support professionals do to address this? We suggest the following:

• Work directly with the governance or nominating committee to create a multi-dimensional, multi-year board recruitment plan.
• If you have not already done so, engage the full board in clearly articulating the most important attributes and competencies (skills, expertise, and experience) needed on the future board,3 along with your “gaps” for the next three to five years, taking into account expected board turnover.
• Actively cultivate a pipeline of future board members. Remember, some of the best candidates for your board also are highly sought after by other organizations—often they cannot accept a position immediately but may be able to do so in two to three years. Where possible, find ways to engage these individuals, such as by having them serve on a committee that allows nonboard members to participate or attend sponsored events as an invited guest.
• Evaluate the pros and cons of adding board member(s) who bring a unique, valued competency but reside outside of your market. Do not underestimate the interest of some terrific, knowledgeable people to serve on your board!
• Create a culture where “automatic reappointment” is not assumed but earned through performance. This requires a rigorous board member assessment process. Encourage the board chair and CEO to conduct one-on-one interviews annually with each board member about his/ her performance and to agree on the member’s future roles/ development as a board member.
• Establish a rigorous annual board recruiting calendar that is used each year, even when the board is not specifically looking to recruit a new member. Conduct a needs identification in the first quarter of the year; source candidates in the second quarter; compile a short list, interview, reference check, and select in the third quarter; and recommend/ nominate in the fourth quarter.

Download Templates:

• Board Talent Management Matrix
• Sample Competency-Based Selection Guidelines for Boards of Directors
• Board Skills Matrix

Conclusion

Remember Jim Collins’ advice: it is steadfast discipline that differentiates great from good. The key to keeping your governance on track for the long haul is such steadfast discipline. Rather than trying to address all aspects of your governance model simultaneously, we recommend that you develop your own 2019 work plan—and, once it is approved, relentlessly pursue those priorities.

The three recommended areas identified in this article represent the most common issues/questions we hear from those in governance support. Your issues may differ, but you can adopt a similar approach. Focus on tangible outcomes. Use key action verbs as we have done here: “require,” “expect,” “actively cultivate,” and “ensure,”—rather than “assist,” “support,” or “plan to.” Recognize that changing well-established habits can be difficult. Spend the required time to generate support for your approaches from board leaders, the CEO, and the executives who interact most with the board. Remain focused. Be steadfast.

The Governance Institute thanks Marian C. Jennings, President, M. Jennings Consulting, for contributing this article. She can be reached at mjennings@mjenningsconsulting.com.