On-Demand: Building Better Boards

April 28, 2021

In this webinar, we shared tips, techniques, best practices and useful case studies to help you re-think your board’s functionality.


Transcript

Good afternoon. My name is Ken Croarkin. I'm the partner in charge of Insurance Industry Services here at EisnerAmper. I want to welcome everyone and thank you for joining us this afternoon.

Ken Croarkin:This is the first of a three-part webinar series on the human side of insurance with today's topic being Building Better Boards. I hope you find today's session very interesting and informative. I've been working and interacting with insurance industry boards for close to 30 years, from early as an external auditor but also on the company side and industry. In addition, I currently serve as a board member of a not-for-profit board, which has given me a different perspective.

Good corporate governance has always been important, but the job that boards do continues to grow in importance, coupled with an ever increasing degree of scrutiny by regulators among others. As I have interacted with boards, I'm consistently impressed with how board members take their responsibilities very seriously. I think today's topic is very timely. Now I'd like to introduce Lisë Stewart, who is the partner in charge of EisnerAmper's Center for Individual and Organizational Performance. Lisë works with many boards of all stripes across the country, and wrote the ebook Building Better Boards for the US Department of Commerce. She's here today to talk about what makes for an outstanding board. So with that, I will hand it over to Lisë.

Lisë Stewart:Great. Thank you, Ken, and thanks for inviting me to talk about this subject because I think it's really important. It's interesting I think sometimes people get onto boards and they realize that it's not all it's been cracked up to be. It doesn't always meet our expectations and that can be such a difficult position to be in. A few years ago there was an article in the Wall Street Journal and the author of the article said if your board were to be abducted by aliens tomorrow, would you notice, would you care? And what we want to do is to make sure that, yes, your organization would notice and, yes, they really would care. We want to make sure that we're helping boards to add value, be strategic and really identify those key opportunities for the organization to grow.

With that, today what I want to do is to share some information that comes from really a wealth of experience. It comes from our own research, from reading and studying the research of other people, and it also comes from my experience of being a board chair for many different organizations, just sitting on boards, and also the work that we've done in consulting with boards for over 33 years. I tell people I earned all this gray hair. So it's been a long time and we've got lots of great stories to tell. So let's talk a little bit about what does it take to be really a fantastic board.

Great boards have certain characteristics in common. First, it's almost a given, it's not even on the slide per se, and that is that it's really key that board members enjoy the experience. That it is something that it brings value to their work, their lives, the organizations that they're involved in, and that they also have a good relationship with the CEO and the executive team that they're working on. We're going to talk a little bit more about that later, but I think as we go through all of this, we should be reminded that it's a two-way street. We need to make sure that our boards are effective and working well. And to do that, we need to make sure that the organization is and that they're working well together. That we've got that sort of two-way communication.

First of all, we need to make sure that we have people on the boards who really believe in the mission and the vision of the organization, that they're not just voluntold to be there, or maybe this is just something to do in retirement or whatever it is that it looks like. We want people who are there because they really do care, that this is important to them, and they want to be able to make a difference. Otherwise, those aliens are going to be able to carry them off and nobody really will miss them. So that's kind of the number one and the starting point in making sure that boards are effective.

Also, we want to make sure that board members understand the whole range of their responsibilities and then we are going to go through some of those lists intended by the role and that they know what they're there to do. I think one of the most important things that I find I need to spend time with boards thinking and talking about is the need to remain strategic. It is so tempting for many people, particularly if you've run your own business, if you've been in senior leadership in a company and you're used to dealing with the operational aspects of a business.

To come on a board and realize that you really need to remain strategic, looking at that big picture, paying attention to what's on the horizon, looking at the entire business or market ecosystem and bringing that recognizance back to the organization to consider as they're making their own strategies, it can be hard to do that when we're so used to thinking operationally. And yet the job of operationalizing the plan, that really belongs with the internal operating team, your executive team. Remember that old saying, don't go and buy a dog and then do the barking yourself. The dog here is really the people that are in that executive team that are going to bring the strategic plan to life.

Another thing that I've noticed when I've been working with boards that are just really rock stars is they take some time to set their own objectives. Apart from the strategic plan for the organization itself, they've come up with some things that are important to the board. For example, I was just working with a couple of boards recently and one of them said that as a goal for our board, we want to increase diversity. We have a board that's pretty homogenous in terms of our background and many other aspects, and we really want to be able to expand the diversity. This wasn't necessarily a strategic goal for the organization. It was already fairly diverse, but it was for the board. And so this was something that they identified to work on.

Another board just recently decided that their goal or one of the things that were important to them was to increase their networking, making sure that board members were going out and attending certain events that were being held by the organization so that they could increase their knowledge and understanding of really the networking landscape. So boards that take the time to set their own objectives find that board members report, one, that they feel more engaged, two, that it aligns with their reason for being on the board, and three, that they feel as if they've got things that they can work on with fellow board members. So it increases that sort of sense of connectedness and comradery amongst the board. And that quite frankly just makes it a more enjoyable experience.

We also want that not only do they set those objectives for the board, but they also monitor against those objectives. It becomes something that they determine is really important for them to be able to do. So that's one of the starting point of what we can do to be able to help our boards to be more effective.

LS:Some of the things that great boards tend to do, and remember this is from many years of working with those boards is they take the time to self-evaluate, which means that they are committed to continuous improvement. What I mean by that is that they stop to ask the question, are we a good board? Are we a great board? Are we doing everything that we could do to be highly effective? So sometimes this might mean that they develop their own sort of assessment. Maybe it's a short assessment that they ask at the end of each meeting, or perhaps it's a longer assessment that they take at a regular basis.

I was just working with a board recently and they decided that they wanted to develop an assessment that was really tailored to their particular industry. I think we came up with about 15 to 20 questions. They gave it to their board about once a year to be able to complete. We just did a review of it recently. So they had questions on that board assessment, things like do board members arrive prepared? Are our board meetings effective? Do we have a diverse board in terms of the criteria that they'd identified? Do we have the appropriate policies in place to manage risk, and so on. So they decided that those are the things that were most important to them. I've seen many different types of evaluations or self-assessment for boards. The most important thing is that boards take the time to actually ask the question.

Along the whole line of sort of evaluation and assessment, I really think it's important that the board chair and the people of the committees also stop to ask the question, am I doing a good job? There are certain criteria and characteristics of really good board chair people. It's interesting because I think in a lot of boards, we don't even really stop to think about what are our expectations of a board chair. It's not enough just to know about Robert's rules or Roberto's rules, whichever you choose to use. There's a lot more to making sure that people are engaged, that they're prepared, that there are some ground rules that really help the board to remain focused and moving forward in a way that is deemed to be appropriate for your organization.

I recently helped a board with an assessment tool. This is the first time the board chair had ever heard about the idea that a board chairperson under could take an evaluation. He called me up after the meeting and said, "That was amazing. I'd never even thought about that. I want to come up with a list of the sorts of things that would make me the best board chair possible." So that's what we worked on.

We also want to make sure that when you're in those board meetings, that it's not just kind of rubber stamping the ideas of the CEO or just playing along with the status quo. We want to have some really good, robust conversations that are centered around the mission, the vision, the strategic direction of the organization. We want to welcome people asking some of those tough questions and maybe pushing back. We can do that in a respectful way. But when everybody just sits there and nods and is always in agreement with the CEO, we know that generally we may have a bit of a problem.

Board members also need to be prepared to serve as advocates or mentors or true advisors. The reason that we want people on the board is that we want them to be able to provide information, knowledge, background, and maybe a broader perspective that we wouldn't normally have. That's part of the value of having a great board. So to be able to do that, to understand that we need them to actively bring that knowledge and skill to the organization. And again, avoid just sitting and being quiet.

We also know, of course, that board members are there to monitor and mitigate risks. That's part of their fiduciary responsibility. I think it's really important that we have strong audit committee that know and understand what their roles and responsibilities are and that they're using the information that they get from the audit in a really responsible way. Using it to be able to go back and look at board self-improvement.

Another thing that, this is something that I'm always surprised that many boards haven't really stopped to think about and that is refreshing their membership regularly with the right people. I'm a big fan in staggered term limits, meaning that sometimes boards can get a little old and a little stale. People can be there forever. It's so important to make sure that we're bringing that fresh energy and fresh perspective to the conversation. But if you're going to do that, and we know that sometimes it can take up to two years for board members to report that they feel that they know enough about the organization to add value, we have to be careful about who and how we choose people to be on that board. This is where competencies become really important.

I like to work with my boards to understand what are the knowledge, the skills, the competencies that are going to be necessary to be able to support the organization as it brings its strategic plan to life. Do we have gaps on the board in terms of their knowledge? What do we need in order to make sure that we can be truly effective? Sometimes these competencies will be technical. Let's say you decide that you've got a gap on the board around the area of marketing or networking or something that's more legal, for example, in nature, or from an HR perspective.

And then sometimes those competencies are going to be behavioral. There are certain behaviors that help board members to be more effective. One might be you are perhaps looking for people who will challenge the status quo and ask tough questions. Maybe you're looking for people who have some detail orientation or who generally come and they're always prepared, or people who are willing to volunteer their time or their knowledge or their experience in order to be able to solve problems. Those are behavioral competencies. So a good competency list for new board members should be a mix of the technical skills you need them to have and the behavioral skills that you think are going to help them to be the best board member possible.

And then we also want to make sure that board members know enough about the operational team, what they're doing, how they work, what they've been able to achieve, how they are going about bringing that strategic plan to life. We want to make sure that board members are in a good position to value the contributions of the operational staff. And we also want to make sure that vice versa. As I said earlier, a lot of this depends on a good working relationship between the board and the organization so that they're both respectful of each other's contribution to the long-term success of the organization as a whole.

Now, I want to spend a little bit of time on the roles and responsibilities of board members. It's interesting because there are some roles and responsibilities that people tend to know pretty well, like when I'm going on and I'm working with boards and I ask them what are their roles and responsibilities, this is a list that generally comes up so they know that they need to set that mission, vision, and that overall strategy. Now, in some cases, they're going to work with the CEO and his or her executive team and they're going to do that in tandem. They might simply look at the strategy that the executive team has put together. Sometimes the board takes a larger part of the responsibility for developing up that strategic direction and even writing the plan. Whichever path you choose is fine as long as the board truly is involved in understanding and developing that mission, vision, and strategy.

The other thing that most board members agree is that they need to monitor that organization performance and hold management accountable. That's part of your fiduciary responsibility. We know that it's not always the easiest thing to do. And that kind of goes hand in hand with the selecting, evaluating, supporting the CEO. We don't mind the selecting part and we often don't mind the support part, but the evaluation and the replacement, that can be a little trickier. I find that most of the boards that I work with are hesitant sometimes to give the CEO the feedback that he or she really needs to make sure that they're doing a good job, make sure that we are managing expectations, and that we keep the relationship between the board and the CEO as healthy as possible.

We want to really try to deal with any of those emotional issues around performance before emotion becomes the issue. Once people are unhappy, they've got their nose out of joint or their knickers in a twist, then we've got a real problem. So if we've got a regular way of being able to do this, if it's just part and parcel of the way in which that board operates, it makes it much easier to do this in a way that is less harmful.

We also know that most board members agree that they need to develop and conserve the organization's resources. We're trying to be there and to make sure that we are paying attention to whether or not the company's well-funded, whether or not it's well managed and whether or not that we've got the right resources, including the facility to ensure that the operational team can do the job they've been hired to do. And we want to make sure that the board can sometimes serve as that bridge or that buffer between the organization and the rest of the environment. Maybe it's the marketplace within they operate. It could be from a political or a legislative perspective, whatever it might be. The board often has a really important role there. So they're building those relationships with the wider community.

KC:Hey Lisë, just we had one question which I thought was kind of relevant right now. Someone asked, how does one market yourself to boards after long operational experiences? Hi, Dave.

LS:Yeah. There are a number of organizations actually out there that will help to market for you. There's the Private Directors Association which is one that I'm associated with. There are a few others and they will let you know of opportunities. The other thing that you can do is to find somebody who's currently serving on the board and ask questions about the strategic plan to make sure that you are a fit as opposed to just kind of rolling up there and saying, "Hey, I'd really like to have a board position." Ask good questions about the direction that the organization is going in. What are the strategic goals? And then perhaps make a case of why it is that your particular operational experience could be very valuable to that board. And remember, they're going to be interested in your ability to take that operational experience and turn it into something that is more strategic in nature. It's that bigger picture that's really so important.

The other thing that you can do is some boards will have subcommittees that may be made up of people who are not necessarily on the board. So sometimes a task force to do something in particular, maybe hold an event or whatever it might be and they'll be looking for people who are being groomed or have an interest in being on the board in the future. And so volunteering for that kind of involvement with the board can help them to understand who you are and the value that you could bring in the future.

But I'd certainly start with a few of those organizations that are set up specifically there as a membership organizations to help people who are interested in getting on boards to be able to find that. Also just by food for thought, at EisnerAmper we have a wonderful program called Friends of the Firm and in the Friends of the Firm, people who are interested in being on boards will sometimes fill out the documentation to get into the Friends of the Firm program. And if a board position comes up and we find that there's a good match, that's something else that we can kind of help our clients or people that we've worked with in the past to be able to do. I hope that answers the question.

KC:That was great. Thanks.

LS:All right. I just talked about a list of responsibilities that most board members know. They're pretty familiar with them. But there are some aspects of board membership or leadership that maybe are not always clear or people thought it was going to be one way and it turned out to be the other. So here are four sort of areas that when I'm looking at the role of being on a board, being in an effective board member, these are some of the things that we can generally expect. There's that less motivating but absolutely necessary stuff that board members need to be able to do such as, as you can see there, reviewing the budget, negotiating contracts, compliance, et cetera.

Unfortunately, many boards get caught in a loop where this is all they do. They pay a lot of attention to the financials and pay a lot of attention to the budget and compliance and legitimacy and so on. And after a while, that's one of the things that can put out that fire in the belly because it's just not nearly as motivating for a lot of people who have come onto the board. Then there are the less motivating and episodic. They're less likely to be caught in a loop here. But again, if this is the only experience that people have is what you see on the left-hand side of that slide, you may lose really good board members.

On the other hand, we have to be careful about some of the behaviors or the responsibilities that are exciting but are actually discouraged. When I talk about things such as operational changes, remember we want board members to remain strategic and not operational, and it is so tempting to jump down there in the weeds and start thinking and talking about the operational things that need to be done. This should be handled by a series of questions and conversations with the CEO as opposed to by generally active management by the board.

Relationship management. This happens sometimes when maybe employees go around senior leadership in the organization and say take a complaint or an issue directly to the board. Very much discouraged. There should be in place some policies to be able to deal with that level of management or even mismanagement. And customer complaints. When people from the outside come in and start hobnobbing with a board member instead of taking their issue or their complaint directly to the organization internally. You need to stay away from that part.

However, there are some things that are very exciting, compelling, they're necessary, and they are episodic. This is where when I'm working with the board chair, making sure that they realize that I'm incorporating some of the things that really get the innovation and creative juices of board members going can be very important for keeping good board members, keeping people engaged and making sure that people have the opportunity to add value. So it might be strategy development, some political opportunities, grassroots movements making changes within the industry. Something that really feels like we're making a difference. That's the sort of thing that if we have some of this interspersed in our board responsibilities, people tend to stay more excited.

This is an area where I think sometimes board members are not always clear on what constitutes truly good leadership governance from the perspective of the board. Most boards are pretty familiar with their fiduciary responsibilities. They're really good for the most part at looking at those finances, making sure that there aren't conflict of interest, understanding the legal aspects of what they do, et cetera. Most boards are getting much better at the strategic planning part of this and trying to maintain some emphasis on that big picture.

But it's the framing part that a lot of people don't necessarily understand. Framing is the ability to understand how we use our perspective to review any type of a situation. So we all look through a different lens or put up a different frame. When we become more skilled in the area of framing and therefore leadership development, we tend to practice by using several different frames to stand back and look at the organization. This allows us to be more effective in developing strategy and also can allow us to be more effective in terms of our fiduciary responsibilities.

I find that in helping people to understand their frame, it's all about questions. So traditional questions. When we look at say fiduciary responsibilities, there are certain questions that we're used to asking. Can we afford it? Is there a budget balance? Is our audit clean and clear? But when we start expanding our frame and looking at the organization and the strategy of that organization differently, we might ask a different type of question; bigger, broader questions. Not just is our audit clean and clear, but rather what can we learn from our audit? Can we afford it, change that to what is the opportunity cost? What is our return on investment? When we look at does our budgeting, does our capex plan, does it reflect our strategic priorities?

So when we start talking about how boards really get that rock star status is when boards start asking a different type of question. So here, as an example, when we're looking at this from the frame of strategy and strategy development, trying to really make sure that we're paying attention to that big picture, I've got a whole list of different questions that we might ask about our business model, our services. Are we serving the right people? What is the future of our industry and who is our competition? And I could go on and on. I love generating these sorts of questions. But it all really does go back to the certain frame that we're going to use.

LS:When we're looking at framing and starting to look at the organization through the different frames, you know that it's useful to recognize that this can be complex and sometimes feel a little bit ambiguous. We might not always understand all the right questions to ask. We also know that without asking those questions that we're trapped by just our current assumptions. We all tend to look at the organization through our own lens. So for example, if you've come up through an operational lens, if you've worked within that industry, if you played a certain role in the insurance industry, those are going to be the sorts of questions that you focus in on. While that may be valuable, if you have a lot of people on your board that come from that same industry, you're just going to get a lot of the same sorts of answers or the same sorts of perspective.

There is a level of risk in doing this in that there's a level of risk in being on the board and even asking questions at all. But it's also really important for mitigating risk. And as I said, we all have a current paradigm. So there's a few different frames that I tend to use when I'm helping a board. So I'll often use the structural frame. What are some of the things that we're doing and how does that impact that structure? Do we have the right structure? Sometimes we'll use an HR frame or sometimes a political frame depending on how we're operating, a symbolic frame, and so on. You as a board member might come up with different frames that you think are important. The key is to identify a frame and then practice asking some questions that are going to help you to explore in greater depth.

Here's an example. If I were using the structural frame, here are some of the things that I might consider. I might ask questions such as, what's compelling and exciting about being on the board? Again, do we have the right structure? Do we operate in a way that actually makes it compelling and exciting, or what are the key functions that must be done? What are the functions that should be done but maybe we're not doing them or not doing them as well? What type of a structure for our board might get it done?

I was working with a board just recently and one of the things that they realized in their structure is that currently they had a pretty large board and there was only a handful of people who were really actively engaged in getting things done, or even in the conversation. I was working with the board chair and we decided to put together a number of smaller ad hoc committees to focus on certain elements of the strategic plan in terms of how the board could support the organization in meeting those goals and objectives. We also decided as part of that that on these ad hoc committees, we were going to invite people who are not necessarily on the board at the moment so that they can learn more about the organization and be potentially groomed to be great board members in the future. So it just seemed like a wonderful idea for finding really good board members, testing them out and seeing whether or not they could add value. It was a wonderful conversation.

So some examples of ways in which boards might move forward if they're looking at the organization from the structural frame, they might think about how they could work in a collaborative or inspiring fashion with the CEO. They might think about two to three things that the board wants to achieve in the next few years and what upgrades to the process or practices would need to occur. That's the area where we started thinking about these ad hoc committees to get different things done.

It's interesting with this. I had a gentleman ask me a couple of months ago what to do. He said that he had some board members who were just really not that engaged and that they didn't come prepared and they didn't ask a lot of questions. What's been interesting is that not only our own research and our work around board assessments but also what you can read about from others is that if a board starts undertaking a regular self-assessment, say they do this annually or every two years or whatever they decide, board members tend to opt out, self-select out of being on the board if they're not really very effective because it starts to raise the conversation up about what it takes to be a really good board and a really effective board member. So sometimes self-assessments can serve multiple purposes.

As we're thinking about boards, people sometimes say, well, how do we even get started? We've never really done a self-assessment. We don't talk about things in terms of frames. We have a process that we always use, the board meetings are going okay. So I just have a list of questions that I'll sometimes say, try this out. If you're a board chair or you're a committee chair is just to ask some questions of the group that start to focus on the actual performance of the board itself. And one is, how are you going to monitor and measure your own progress as an organization? How will you know, as a board, that you're actually doing a good job? What do you use now? Do you as a board ever get any feedback?

You might also ask, if somebody were to go out and do a survey of the organization's staff members, maybe the executive team and other staff, and they asked about the board, what would the organizations say? How would they respond to the alien question. Would the organization say that the board is doing a good job. With the organization, will the staff members be able to say what the board actually does or what its purpose is? How will a board know when to flex? And what I mean by that is, from a strategic perspective, if board members are meant to be strategic in their approach, how should they know when to stop and maybe do things a little bit differently? What are the cues that they might look for?

For example, COVID, perfect example. Talk about a big cue, hello. Many boards, all the boards I was working with had to change immediately in the way in which they were working. They had to rise to the occasion and that's how they knew when to flex. It was right there in their faces. But sometimes the cues are far more subtle. There may be other things in terms of political decisions, statewide decisions, what's happening in the marketplace. How would you know, as a board, when to flex? Who do you need to have join the organization to help to get you there in terms of your strategic plan? Do you have the right people on the board in order to do a really good job? Do you have the right people in the organization? Is the CEO in the right position? How can you hold yourselves accountable? What are some of the questions that the board can ask to make sure that, again, they're doing a good job.

In the end really and kind of just to sum this up, great boards not only meet their fiduciary responsibilities, but they create a rewarding and valuable experience for the board members and for the organizations for which they serve. As I said at the very beginning, I want to make sure that if those aliens arrive, the organization is going to be running out there and trying to make sure that your feet are firmly planted on planet earth because you're important, you make a difference and without you, the organization simply would not be as effective or as successful. So that's what we're really trying to achieve. So can I really appreciate the fact that we had a chance to talk about some of these things, and I'm certainly really happy to answer any questions that people might have.

KC:Yeah, we have a couple and just to remind everyone if they have a question, please pop it in the Q&A. We definitely have some time, so please submit your questions. But Lisë, you mentioned the importance of self-evaluation for boards. How often do you think they should be doing that?

LS:It's interesting. I actually think that one of the techniques that really effective boards do is that they've determined say two to three things about their board meetings that would make them really effective. Let's say, for example, that all the board members come prepared, two, that all the board members participate in the meeting, and three, that they remain strategic in their conversation. And at the end of each board meeting, they simply take two minutes, three minutes to say, "According to the three things that we said were important for an effective meeting, how did we go?" It's called the fist of five. I'm sure many of you have seen it before. You simply go around and say, "Okay, how did we go on everybody being prepared?" So if everybody was prepared when they got there, around the room everybody just puts up their hand with a five, or maybe it's a four or a three or a two or sometimes a one.

It's a quick visual for everybody to understand, are we doing well. If we weren't prepared, then the board chair can ask the question, what's one thing that we could do differently or better to make sure that people come prepared? You do the same thing with the next question about everybody being engaged and the next question about the strategic plan. It only takes five minutes. But boards that take the time to simply ask the questions tend to function more effectively.

Other boards will do something say on an annual basis. I don't think board assessments have to be huge. You might choose five, 10, 15 questions that really help you to understand how you're operating as a board. You can have that program. We have one ourselves. So EisnerAmper actually offers a board assessment tool for corporate boards. It's very simple, it's easy to take, takes less than 10 minutes to fill it out and then you get a collective report. It doesn't show any one person's answers but it's a nice aggregator report that the board then could use to just tweak the way in which they're working. So I would say at least once a year, but do consider just having a couple of those things that you think are important to monitor on a more regular basis.

KC:It makes sense. And I guess it really does depend on the kind of board you have, how comfortable people are talking within the room about how they're doing as opposed to say, I'm sure many boards like to do that with a similar kind of tool that you mentioned there, but behind the scenes. How can boards remain more focused on strategy rather than delving into the operational side, the operations?

LS:Right. First of all, I think that building in a process for reviewing the strategic plan on a regular basis is important. I don't mean a gigantic review where you're really going into a whole lot of detail. What I mean by that is let's say as an organization you have three to four goals or five goals or whatever it might be in your strategic plan. I would suggest that the board just take a few minutes as part of their meeting to ask the CEO how we're doing, how are we going, according to those goals that had been outlined. Next, be prepared to ask some questions but to give each other feedback on whether or not those questions really are strategic. It's perfectly fine to ask the CEO to give you an explanation of how they got to that particular decision or what was behind that or how they see remedying the situation that's at hand. So making sure that we're asking those sorts of questions.

And then finally, building into the process. Maybe not every meeting, but at some point in the year asking the questions prior. What I do with my boards when I'm a board chair is at least once a year, I come up with a range of questions that help the board to focus on big picture issues. So I might ask a question such as, what are two or three things in our industry that you believe may be a game changer we should be paying attention to in the next two to three years? What are some of the legislative changes, or whatever it might be, that you believe may impact our ability to reach our strategic plan or our goals, and so on. So I just come up with four or five questions. We send those out to the board ahead of time so that they can be prepared to discuss them.

And then sometimes I'll say for that part of the board meeting, let's have a facilitator, let's bring in somebody who's not on the board to actually facilitate that conversation so that all of the board members, including the board chair, can actually participate in the discussion. So those are some of the things that I find that really good boards will often do in order to try to make sure that they are staying strategic. But really Ken, I think that part of it is it is hard to do. As I said, I sit on boards, I'm the board chair of several boards. And every once in a while, I find myself drifting down into that operational area because I know these businesses. I have an opinion on things that they could do. So I have to remind myself that that's really not my role.

So sometimes what we have to do is to make it okay to say, "Whoa, whoa, whoa, that feels a little operational. Maybe we need to dial it back a little bit, or maybe we need to change that question around." We need to make it okay for us to banter back and forth on the board and give ourselves feedback without being embarrassed about it. This isn't calling somebody out and saying, "I can't believe you're being so operational." But rather I think that there's maybe, as a strategic angle to that question, can we shift that question a little bit? And as long as we're all in agreement, we understand the difference between being strategic and operational, I think it makes everybody's job a lot easier.

KC:I'm sure definitely the temptation on an insurance board, for example, with insurance industry members, you really want to get to the operational level and it must be very hard. You must be having to pull yourself back all the time. I can certainly understand that. One more question. What is the most important activity that you think a board chair can do to ensure that a board's effective?

LS:Well, one is I think the first of five that working with your board to identify, what do you think makes us effective? Ask your board the question. So if you're going to be a really effective board, you're going to your next meeting, you're the board chair, you say, "Hey, at the end of this meeting, I want to spend 10 minutes just talking about effectiveness." And at the end of it say, "I'd like to determine with you what do you think are the three things that we use a board could do to ensure that we're highly effective, that we're adding value to the organization." Get them to brainstorm that and come up with their own list. It does not need to be a long list. As I said, two, three, maybe four things. That's fine. Just doing that one thing often changes the entire sort of mental landscape of the way in which that board operates. So that can be really important.

The other thing that a board chair can do is to ask your board. "So board, as a board chair, I'd really like to know what are two or three things that I could do to be a more effective board chair. How could I help to lead this organization, this chair, this board more effectively?" Actually ask for feedback. Set it up in some sort of a poll so that it's anonymous and see if you can get some information back that way, which, one, is some really honest feedback.

And then the third thing I would say is as board chair, have a conversation about competencies, meaning that work with your board to determine what are the behavior on technical competencies that make for a really effective board member. Write those things down. And when it comes to behavioral technical competencies, maybe you need to have board members that, I don't know, have a sense of humor or who maybe bring a background that's really interesting and diverse and one you just really don't have here, whatever it might be. But be willing to look at that.

You don't just want people who are eager for a board position to join the board. You don't necessarily want your best friend or your attorney or whatever it might be. You want real talent on that board so that it's helping that organization to be effective. So I would say that those are probably the most important things that a board chair could do.

KC:That's great. Thanks, Lisë. I think that's all the questions we have. So thanks for your presentation. That was wonderful. I'd just like to thank everyone for their time and questions today. It's been a great discussion and I hope everyone has got a lot out of it. Just a reminder to register for the next two parts of our series which are coming up in May and June, Your Strategic Roadmap on May 26th and Successful Succession Strategies on June 23rd. Please register for both. You can sign up through the widget on the screen or via the follow-up email which you'll receive from us at the conclusion of the webinar. Just a reminder, both also qualify for CPE. So with that, many thanks for attending and good afternoon. Thanks again, Lisë.

LS:Thank you, Ken.

Transcribed by Rev.com

              

About Ken Croarkin

Ken Croarkin is the Partner-in-Charge of the Insurance Industry Practice. He currently leads a number of Statutory and GAAP external audit engagements, and also provides internal control consulting services to insurance companies and brokers.

About Lisë Stewart

Lisë Stewart is Partner-in-Charge of EisnerAmper’s Center for Individual and Organizational Performance and the Center for Family Business Excellence Group, as well as a leader of the firm’s Environmental, Social and Governance Services (“ESG”) practice. Lisë has experience in organizational development, strategic planning and training, and human performance management.

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