Why Non-Executive Directors need to be more Coach and less Executive!

One of the common themes – indeed perhaps the most common -?I find?from Board Effectiveness Reviews is the increasing amount of detail that the Board has to deal with.?This is especially the case for financial services regulated companies where Board papers frequently top 1000 pages (yes you did read that correctly!).??But it also exists elsewhere – indeed about the only time I saw about the right balance for Board paper detail was for a brewery (read into that what you will!)

There is often an interesting split in opinion from Directors about the level of detail Boards require: the NEDs will complain about how much data (rather than information)?they are asked to read often at short notice while the Executive Team will say they are being asked to produce more and more papers for the Board thereby becoming little more than a paper producing machine.?

It is an important issue to tackle because, of course, producing Board papers should only be a small part of what the Executive Team is there to do – implementation of the Board’s decisions is the principal objective.?I have seen Boards where the papers look pristine with whizzy charts and diagrams and without a typo to be seen – they look good enough to have been professionally published.??But at what cost??At the cost of time of course.?And before long it will onto the next round of Board and Committee meetings when the whole paper producing cycle happens again.?Spending time producing those perfect papers has robbed the Executive of the time to implement decisions, they very thing they should be doing.?No Company will be remembered for the quality or detail of its Board papers but rather for what decisions it has made and implemented.?Don’t get me wrong the quality of papers is important but it is not the overriding factor the Board must focus on.

The critical question to ask is why do some Boards want so much detail often even if they say they don’t??From my experience working with Boards and Excos I believe to a large extent this is due to the way we look at the role of the Board as a whole.?NEDs are there to provide oversight and?challenge (hopefully constructive of course!) the Executive.?However, the NEDs along with the Executive Directors are ultimately responsible for the Company and feel they must be in a position to know what is going on often to a minute level of detail.?Executives too often play to this: they use the Board as a forum to report to rather than one to use as a sounding board (excuse the pun!).?Knowing what has happened over the intervening period is, of course, very important both because it provides context but also it allows the Board and particularly the NEDs to fulfil their duties of oversight and responsibility.?However, frequently the level of data the NED wants simply feeds the detail machine.?And becoming more immersed in the operational detail has the danger of turning the NEDs into quasi Executives something nobody wants if we are to maintain the true independence of NEDS.?

Equally the Executives rise to the call to provide this detail and the Board becomes a forum to report to rather than one that should discuss, guide and debate.??The Board becomes little more than an approving body (one of its roles granted but not the only one, not even the most important one).?For example, it is not uncommon to see very small amounts of spend having to go to the Board tying up their time in operational detail rather than focusing on more material matters.??Again, this runs the risk of turning NEDs into quasi Executives thereby prejudicing independence.

So how do we resolve this??Well, for a start NEDS need to be less Executive and more coach!?What do I mean by this??In coaching, as any seasoned practitioner will tell you, the aim of the coach is not to provide detailed answers but to ask powerful questions to allow a client to resolve their own challenges.?It’s powerful because the coach and client are equal (thinking) partners but it is the client who ultimately finds their own solution,???How more effective would a Board become if the Executives used it more as a forum to bring ideas and proposals not dominated by detailed presentations but by a (very) few simple propositions inviting the NEDs to ask some powerful questions and let the Executives reflect???The focus would be on the discussion and debate not the presentation (and whether the second sentence of the fifth paragraph should end with a full stop or a colon!?Alright I am being facetious but you get the picture).????

It is also debatable how much detail any Director can take?and so having short, crisp papers is likely to focus the mind?- and the debate – much more.?This hopefully leads to more effective decision making.?In his Report The 12 Elements of Independent Judgement for a UK Board: A Guide for Directors Sir Andrew Likierman cited the Bank of England and Amazon as Boards where there was a recommended limit of six pages for a Board paper.?It is rare indeed to see Board papers so concise and in part this is due to the fact that it is often much harder to write a crisp report – Mark Twain’s quote “I didn't have time to write you a short letter, so I wrote you a long one” can be applied equally to Board Reports!?The Bank of England’s guidance on writing effective Board papers, also cite by Likierman, is a must for all presenters to Board meetings:?Use your judgement to make clear recommendations; be concise and keep to six pages of content; identify the reader and write for them, using the right format; write in plain English and jargon free.

But back to coaching!?Why is a coaching approach a better one (rather than diving into the detail)??

• Firstly in a coaching relationship there is a process of contacting.?This is not legal contracting but being clear how the parties’ relationship will best work.?It can take some time to determine often taking a large part of the coaching session. But it is worth waiting for the clarity because the effectiveness of the working partnership between coach and client is critically dependent upon it.????With Boards, NEDs sometimes complain that Executives fail to ask for their help and guidance, particularly during a crisis?- that is frustrating for NEDs because they have probably been through similar situations in their own Executive careers and can act as ideal mentors.?Equally some Executives complain that the NEDs seem to spend most of their time interfering in the Executives’ running of the business and become very operational in their approach.?The interesting thing for me as a Board Effectiveness Reviewer is that while they are prepared to say these things to me, they are not always willing to say them to each other!???But of course they should.?One of the recommendations I make with many Boards I review is that they have a session once a year to discuss how all members and attendees best work together.??What works best for them??And what doesn’t??What do they want to get out of the Board dynamic??Is the mandate most effectively set????Really effective Boards already do a mini version of this at the end of each Board meeting asking questions such as:?How did the meeting progress??Are there any papers we didn’t really need? Or did need??Have we spent the right amount of time on matters according to their priority??Is there anything we could have done more effectively??Having an annual session simply reinforces this good practice.

• Second, it is much more about listening.?One of the features of some Boards I see is a tendency for a lot of people talking and interrupting each other but not actively?listening to what is actually going on.???If you are waiting to dive in with a question or to make a point, you are probably not actively listening to what is being said.?That can lead to misunderstanding and onward negative conflict around the Boardroom table.?Not a healthy dynamic for an effective Board.????Of course it takes a skilled Chair to ensure that everyone does get their say (if they want to) but allowing people to listen, really listen will add to the understanding of the Board and thereby their effectiveness.?I believe it was Peter Drucker who said something along the line that The effective manager listens first, speaks last.?That is a mantra that could be adopted by (soon to be effective!) Board members too.

• Third, there can even be moments of silence!?People often find silence uncomfortable and I dare says Boards might too but it can be very effective in coaching allowing a client to really reflect and think about how to resolve their own challenges.?I recall earlier in my career a CEO saying he always asked a potential fund manager how much of their time they spent staring out of the window – if it was less than 35% they didn’t get hired!?Now while I am not suggesting Board members spend their time staring out of the window in Board meetings (although some do!) having some time to reflect – perhaps with a little silence – may help then become more reflective and effective decision makers.

• Fourth, as I outlined above, coaching is about asking powerful questions (and not finding rapid answers and solutions!).??I talked about detail above and I am going to mention it again (and probably repeat the point but it’s an important one so that’s no problem!).?Rather than producing reams of data and detail (of past matters which the Board can do little to change) for the NEDS, how much more productive and insightful would it be if the Executives produced a set of very, very short papers with some of the future issues they are facing and ask for the insight and wise counsel of the Board members??Of course papers can provide options and recommendations but maybe on occasion might it?be more effective not to place any constraints on the Board about what the future scenarios are but to have an open debate??Who knows where the discussion might lead but it just could just result in an unexpected and very profitable future for the organisation that no one had ever thought about before?- original thoughts and ideas unconstrained!?

• Fifth, coaching is all about creating awareness and presence.?Again, this goes hand in and with active listening.?One of the principal qualities for a coach is to create a presence in which their client can feel safe, listened to and thereby helped in the awareness of whatever they want to deal with.?I have used this in the interviews I conduct for Board Effectiveness Reviews – ensuring I have the presence to really listen and understand the perspective of the Board Director or Board attendee I am interviewing.?These interviews can, on occasion, be a challenging experience for the person being interviewed but more often, if a coaching approach is adopted by the interviewer, they allow for a full, reflective discussion.?I often hear Directors say when I ask a question say things like?“I hadn’t ever thought of it that way.?You have really made me reflect.?I might adopt that approach in the future.”?Hopefully, it results in a more effective Board Effectiveness Review but much, much more importantly a more effective Director.

• Finally, coaching is a partnership of equals.?Nancy Kline has called it a Thinking Partnership.?I think this very apt.?As far as Boards are concerned it is the partnership component that is so important.?Sure, NEDS and Executives bring different things to the Boardroom table:?NEDs bring their previous (or indeed current) experience while Executives know the workings of the organisation better (or should do!) as they are engaged full time.?But for really effective Boards one is not better than the other, they are complementary – if not in the legal sense, in the dynamic it should be a partnership of equals if the Board is to work to its optimum.

So if you are a NED just about to plan for your next Board meeting ask yourself whether you really need all that detail and reporting of what has gone on in the past (which you can’t change) or whether you will allow your attention to focus on the meeting and the discussion, making a careful and considered contribution but, even more importantly, listening more to what others have to say.?You may be pleasantly surprised by the results!