Q4 is Coming to a Close

2023 has been a big year, with many milestones reached. We also saw a significant amount of corporate governance headlines in the news.

Whether you're an experienced member of a company's board or envision being part of one in the future, my hope is that I've been able to help you hone your craft and navigate your way.

With the rest of this letter, I share with you my most popular posts of the year. Let me know which ones resonated with you the most and what stood out as valuable. I look forward to exploring even more topics in 2024 by hosting new Board Compass events.

As we gear up for the New Year, keep your eye on the future and a focus on developing your knowledge to become a value-added director.

I also wish you each a restful, happy holiday season and a strong finish to the year.

What is the role of an effective director?

In the Directors’ Education Program (DEP), one of the first exercises the participants go through is to name three things that make a good value-added director.

The participants—many of them experienced directors themselves—commonly respond that good value-added directors should be: curious, courageous, committed, independent, available, responsive, respectful, informed, proactive and transparent.

It is no easy job to be and do so many things at once.

Therefore, to be a good value-added director takes significant effort.

Neither chance nor potential are enough to make a good director.

You will need both a lot of learning and persistence to achieve the characteristics of a good director—to inculcate them into how you think, talk, work and act.

These are not purely theoretical models: they are things that you must learn how to do to become an active, informed and value-added director in your board of directors.

Learning communities can help by instilling in you the competencies necessary to be an effective director, and equipping participants with toolsets to overcome the challenge of information gaps, time squeezes and behavioural dynamics that can occur in the boardroom.

Characteristics of a Bad Director

If you want to build a value-added board, you need to be careful who you choose to sit as a director, as the wrong person may cause greater harm than the right person may cause good.

In her book The Black Box of Governance, Sandra Guerra outlines the top five reasons why directors fail in their role.

Some of the characteristics of a poor director include: being unprepared for meetings, talking too much, not listening well, not expressing an opinion, and multitasking.

“The Board Director’s Compass”

A board of directors has zero chance of providing value to the organization it oversees without a great, competent board chair.

The Chair's role is simple: They must be great conductors.

Here is my deeper explanation.

Here is a link to Benjamin Zander's TedTalk on what it takes to be a great conductor.?I often reference this talk as a metaphor for the skills required of Boardchairs.

BeRadical Group - The Podcast

I recently spoke on a podcast with BeRadical Group and one of the key takeaways was the importance of engaging board members for strategic guidance, not just oversight. Board meetings should be seen as opportunities to focus on the future and offer innovative strategies. This includes selecting directors individually and fostering a strong chair-CEO relationship. For startups, I advise gradually building an advisory board of experts and wisely anticipating disruption. Listen to the full discussion to learn more!

Listen to the Podcast Here

Want to be a Value-Added Director? Look at Your Agenda

Setting the agenda is one of the most important decisions boards make.

I like to describe boards as operating along three lines of sight: hindsight, oversight and foresight. Taken together, hindsight and oversight describe the compliance and policing job of the board. But where oversight and foresight meet, the strategy and talent role of the board—essentially, addressing the questions of “Where do we want to go?” and “Who will get us there?”—come into play. This future-looking aspect is where value is added.

Many boards are very good at policing. Not many are good at adding value. That’s because boards tend not to invest their time in value-added activities. According to a McKinsey survey of 275 directors, most directors spend 70% of their time on policing activities, and only 30% of it on value-added activities. When asked their preference, directors expressed a desire to essentially reverse these proportions.

There is evidence that focusing on value-added activities correlates with good performance: a Russell Reynolds study found that top-performing companies spend more time on value-added activities and over 50% less time on policing activities than their competitors do.

To manage the valuable investment that time is most efficiently, my suggestion is to make an explicit decision prior to every meeting to build an agenda prioritizing value-added, future-facing activities. I’ll have more to say about this in an upcoming post.

Events Summary

As I've teased at the beginning of this newsletter, I hosted 4 events this year. They were as follows:

• "The Board Director's Compass" on July 12th
• A 2nd session for "The Board Director's Compass" on September 13th
• "The Revolutionary Impact of AI with Nick Darveau-Garneau" on October 30th
• "Surviving the Generative AI Extinction Era with Nick Darveau-Garneau" on December 8th

In total, we were able to welcome over 250 guests to these events, which was a great milestone to reach.

Please keep an eye out for future event announcements.