News and Views
April 29, 2020
Posted in: WATSON Views
It’s a new world, with rapid change, new challenges, and new opportunities. In the coming year, boards will be helping their organizations develop new and innovative strategies, overseeing culture and talent in a time of profound workplace change, and navigating a rapidly shifting world economy. They might hire a new CEO, contemplate a merger with another organization, or oversee significant changes to their business model. Most likely, they will be doing all of these things remotely, relying on virtual board meetings and other technology instead of interacting in a physical boardroom.
Under the new reality, boards are going to be working in a radically different environment – so why would we assume that the way forward is to replicate traditional board practices and force fit them to this new paradigm? With COVID 19, board practices have already been shifting, with more frequent meetings, regular briefings from the CEO, and access to real-time updates. As we look forward, in addition to thinking about what they should be focusing on, boards must also think about how they are going to do their work. With continued health risks and social distancing, many directors, particularly those who fall within high-risk categories, will be reluctant or unable to travel and engage in traditional board meetings. As a result, boards will need to evolve – or even fundamentally shift – how they function in order to tackle the important work ahead. In order to create effective board culture and dynamics, have meaningful conversations, and continue to provide value, boards will need to be intentional about their board practices.
Applying existing meeting practices to a videoconference is a fine short-term solution. But longer term, boards and organizations need to assess and adjust how they are meeting remotely to ensure the quality of dialogue is sustained. With a shift away from in person meetings, boards need to think about how to structure virtual meetings for optimal engagement.
Anyone who has attended a full-day videoconference knows it feels very different from a full-day in person board meeting. We anticipate boards will reassess their meeting rhythm and adjust their forward calendars, shifting to shorter, more frequent meetings with ample time for breaks built into agendas. Not only does this allow the board to stay up to speed as their organization quickly adapts to changing circumstances, it promotes greater engagement and focus when relying on technology to interact.
With a shift to the board’s forward calendar, meeting agendas will also need to evolve. Rather than shortening the length of each discussion topic, we anticipate meetings will be focused on different areas and leverage different technologies to support the nature of the conversation. For example, boards might meet first for a compliance-oriented meeting to review quarterly financial statements and receive regular reporting, using an online platform that supports information sharing and group discussion. The board might meet separately to discuss emerging strategic issues, drawing on a more collaborative tool that enables breakout groups and virtual whiteboards for brainstorming. Boards might draw on online polling technology to quickly capture votes in real time during meetings. They may also shift communications between meetings to a chat-based forum where directors can share resources, discuss emerging issues, and submit questions.
Moving to virtual meetings will also require a shift in how individuals show up and participate. While watching a screen is typically a passive activity, directors need to engage actively in videoconferences while keeping contributions concise and focused. This means closing all other windows and disabling notifications to avoid distractions, thinking consciously about body language and tone, and preparing clear notes and questions in advance of meetings. For management, this means bringing even more discipline to presentations, highlighting the top three to five insights from pre-reading materials. For board or committee chairs, this requires a new toolkit of facilitation skills to manage the flow of conversations, generate genuine engagement, and ensure value is added (stay tuned for our upcoming article on how chairs can create the right environment for board discussions in this new paradigm).
Committee meetings may follow suit with more frequent meetings or may meet more sporadically and report to the board in specified meetings when there are important committee items to discuss and report on. We may also see broader changes to committee reporting practices, an area boards often struggle to structure in a focused and efficient way. One great idea we’ve seen is a committee report podcast or video shared before the meeting for information, with any recommendations from committees put on the board agenda for discussion and decision-making.
Another area that will require an innovative approach is board social time. Board dinners, offsites, and informal conversations during coffee breaks are important opportunities for directors to connect, get to know each other, and build relationships. We strongly believe that social time is critical to build trust and a positive culture. Building culture online is possible but requires creativity and intentionality. Ask directors to join meetings early to create a forum for small talk, be more intentional in having a regular check-in question at the beginning of meetings so directors can connect on a personal level, host a virtual social hour or pre-meeting board dinner focused on education (or purely for social engagement).
Governance professionals will also need to expand their repertoire and become adept at collaborating with chairs and executives on structuring agendas, choosing virtual platforms, and supporting effective workflows. We have all experienced hiccups at the start of a virtual meeting or found ourselves in a situation where the platform gets in the way of good process or content. Whether designing a virtual AGM, making board meetings seamless in terms of technology, or ensuing security and confidentiality across all platforms, governance professionals will need to be knowledgeable, well-supported by experts, and ready to engage.
As with any new board practice, shifting to virtual meetings will be a process of trial and error. It will require directors to be patient and open to new ways of doing things. It will also require a thoughtful feedback process to gauge how new practices are working, ensuing they are given enough time to adjust and adapt, while also being nimble if things aren’t working and new solutions are required. Regardless of the changes made to accommodate virtual meetings, directors will need training on how to use new technology, proactive communication from the corporate secretary through the transition, and strong leadership from the board chair. Organizations will also need to be highly attuned to cybersecurity risks related to using different online tools, as well as any legal requirements around confidentiality and privacy.
Along with any new challenge comes new opportunity. We see the potential for boards to become more nimble and adaptive, develop new habits to add more strategic value, and streamline some of the mechanics of board meetings. We are encouraged by the many thoughtful and innovative ways organizations of all shapes and sizes have stepped up to tackle challenges. With that same level of intention and ingenuity, we look forward to seeing the many ways boards adapt and step up to lead in new and different ways.
We hope you find a useful idea or consideration to bring back to your board. If this article sparks any questions, or a new idea to help your board have the right conversations and build culture in this new paradigm, shoot us an email and let us know what you’re doing – we always love to hear the great ideas that work in your boardroom.
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