There is a similar “Minnesota Nice” dynamic that happens in the boardroom as well.  Some call it the “code of collegiality”, some refer to it as a “passive board”, while others simply call it a conflict-averse board.  Many times it’s well intended, but there’s a fine line between maintaining healthy board relationships and confronting the challenges directors are entrusted to deal with.

Sometimes this is the result of a strong individual (or group of individuals) on the board.  This person(s) has such a strong presence and influence, good or bad, that no one speaks up or challenges them.  When the newbie director challenges them in their first board meeting, it’s a regrettable experience not to be repeated.

Other times, it’s a legacy issue – consisting of a group of the “old guard” and a group of the “new regime” directors.  Rather than collectively engage in seeking the others’ perspective, battle lines get drawn and there’s no active discussion or advancement of new ideas, since both parties believe the other side has their heels dug in so far it’s not worth the effort.

And then there’s the “curse of the unknown”.  Directors on boards of companies outside their industry don’t have the acumen or ability or interest to more fully understand the complexities of the company.  Rather than risk the embarrassment of not knowing something, they tend to go along with the group and/or the director who appears to know the most about the subject.

One of the board’s key value-added roles is to provide guidance, counsel and oversight.  There will always be difficult decisions to make, trade-offs to be weighed and new options to be explored.  A rich, engaging and inclusive dialog is the only assurance that these topics will be given the best thinking and bring the full gifts the board has to offer as a means of providing value to the company.

But, while civility and professionalism are essential, silence and complicity can erode the impact and effectiveness of boards.

Here are some practical considerations on how to deal with a board where “seldom is heard a discouraging word”:

Information – Are all the directors getting the right information to be able to fully discuss and debate the issues?  Or are they getting only management’s view (or just the Chairperson’s view)?  Make sure that, for all difficult topics and discussions, everyone is fully informed and able to participate.

Board cultural assessment – Has anyone taken the effort to get a solid assessment of the working culture of the board?  We’re not talking about the annual assessment; we’re talking about an honest, thoughtful, objective assessment of both the culture of the board (how would everyone define it?) and its operating dynamics (among, between and across constituents).  Getting a clear, objective view of the personal and intrapersonal as well as cultural roadblocks is essential if the board is ever going to be able to constructively take on difficult issues and end up with the best outcome.

Knowledge base – Do the directors know enough (or are they working on increasing their knowledge of the business and the industry) to be able to have a well-founded perspective on most issues?  It’s unreasonable to expect every director will be an industry expert, but this is where board training comes in.  Is your board taking the time to (annually) invest in educating the board on all aspects of your industry – your market position, the product offering, competitors, pricing dynamics, etc?  It shouldn’t require months of schooling, but a thoughtful director-training curriculum that’s well administered will go a long way towards enhancing the voices in the conversations.

Face time – How much time are the directors spending together outside the boardroom?   While logistics can certainly make it challenging to get together, how likely is it that people who meet 6 – 8 times a year will develop the kind of relationships that enable them to work together collaboratively and constructively on difficult issues?  Board retreats are one way to build cross-director rapport, but usually the agendas are full to begin with.  Get creative.  Spend more 1:1 time together outside the meetings.  Call each other up.  Learn more about them and their business.  An investment in time at the personal level will yield dividends further down the road when things get touchy.

While it feels nice to get along with everybody, boards are there to make important decisions and, at times, have difficult discussions.  But, if all the voices aren’t being heard and deferment and acquiescence are the rule of the day, the board is failing its fundamental duty to its stakeholders.  Just as unfortunate is the fact that, without a robust and engaging dialog, the company is not getting the full benefit of all of the gifts, skills and experiences that are represented at the board table.

It was a chance to make a difference, leveraging your experience and expertise, working with other successful executives, overseeing new strategies and generating some incremental income to boot.  The more boards, the more opportunities to increase your personal brand and to make a real difference in the industry.

Rather than a spark of excitement in their eyes, a lot of board members these days have the glazed-over look of weariness and worry.  Yes, there’s the occasional mention of good things, but more often than not, the topics veer towards an expanding board agenda, growing pressure from shareholders, investors and regulators and an accelerating risk landscape – not to mention the uncertainty of the business climate and the burden that it brings to the board.

What happened?

There’s no doubt things have gotten tougher for directors.  It’s never been about the money, but rather the opportunity to provide wise counsel and sound governance to a company.  Boards are usually filled with people who have made a living solving tough problems in their own careers and companies – why should these changing dynamics make this much of a difference?

Part of the problem is rooted in a simple truth – if what you’re doing is not personally fulfilling, it affects things such as your enthusiasm, productivity, engagement and contribution, to name a few.  Taking on new challenges, solving a tough problem, overseeing a new strategy and watching it succeed – now, that’s fulfilling!  And sadly, it’s not happening as much at board meetings these days.

One element that’s taken the fulfillment out of being on a board has been the structure of board meetings themselves – beginning with the enormous board book received a week before the meeting, to the overloaded agenda, to the short amount of time to have a full board discussion on a difficult issue.  With increasing frequency the board meeting has become the equivalent of trying to put ten pounds of stuff into a five-pound bag.

There is hope.

A good idea is to go back to the beginning:  the core fiduciary duties, legal obligations and key roles of the director.  With these in mind, and using a critical filter, look at the current board agenda and materials and test them against the following:

• Is this (item) a part of fulfilling the director’s duties, obligations and roles?
• If not, does it belong in the meeting?
• If it does, are we spending the right amount of time on it?
• Is there anything missing, something that should be part of fulfilling the above duties?

This will probably yield a few insights but nothing earth shattering.  So it may require boards to go to the next level of detail, asking the following questions:

• Do you believe the board meeting process (board book, agenda, discussion, etc.) is getting in the way of meeting the governance responsibilities and fiduciary duties of the directors?
• Is the board getting to all of the “right” topics in the course of the meeting?
• What’s missing?
• What needs to be eliminated?
• Does the board have the right committee structures and are they being used effectively?
• What can be done by committee vs. the full board?
• Is the board getting the right information to make fully informed decisions?
• If not, has the board provided clear, thoughtful input to management on exactly what information it requires?
• Does the board have the right people at the table – those with the backgrounds and experiences to help make the best decisions?
• Does everyone fully understand the business of the company and how it competes in the market and how it makes money?  If not, what training and information is needed to address this?

Done in a candid, objective manner and aligned with the core principles of governance, this process should provide refreshing opportunities to rethink the board meeting.  It not only reinforces the critical roles of the director, but also may begin to make the boardroom experience more fulfilling.

But we need to break this rule just this once.  Here’s why – with the recent launch of the Solomon365™ platform, it’s worth speaking into why a cloud-based governance platform (as opposed to an extended duration consulting-based approach), is needed in today’s board and risk governance market.

So, here are six reasons for “why a cloud-based governance platform?”

1. Timeliness:  one of the primary causes of the market meltdown of 2008 was governance failure – at the board and risk oversight level.  The new laws and regulations that are emerging in the aftermath are going to create a new set of challenges and pressures on already burdened boards.  A platform provides a new and fresh approach for constructively dealing with these as well as other challenges, preventing board capacity from being overwhelmed and avoiding a negative impact on the company performance.
2. Complexity: governance – at both the board and risk level, is complex and getting more so every day.  Boards today are essentially using the same set of “tools” they were using 15, 20 and even 30 years ago.  These may have worked in the past, but the complexity of today’s board environment greatly exceeds the capability of traditional boardroom tools.  Equipping boards with innovative tools that enable them to keep up with these fast-changing governance dynamics is one of the most impactful features of a platform.
3. Connectivity:  because boards primarily operate behind closed doors, their ability to connect, share and collaborate is hampered by the (appropriate) need for confidentiality.  But openness and collaboration are quickly becoming the norm for how organizations compete in the marketplace today.  A platform enables director and board collaboration, the sharing of best practices and an open exchange of ideas, all while maintaining crucial confidentiality and security.
4. Productivity: a common lament of board directors today is, “…there’s so much to do, but so little time to do it.”  Unfortunately it’s not getting better: board books are getting thicker, agendas are expanding and more burdens are being placed on committees and management (in their board reporting duties).  By providing a robust set of tools and processes to address this issue, a platform brings much needed relief in helping boards more efficiently manage their already limited time and availability.
5. Impact: the other issue being voiced by management is that boards are at risk of becoming “ceremonial” – a process that needs to be completed but is not adding any value to their work and company performance.  In fairness to all hard working boards, this isn’t entirely true, but there is growing validity to this notion.  One of the main benefits of a platform is it gets the board to a state where it is perceived as a true strategic asset – bringing value and making a positive impact for the company and stakeholders.
6. Competitive advantage: a platform integrates board and risk governance as well as complements the existing ERM and other systems, thus providing unique competitive advantages.  These advantages are evident in several areas, the two most impactful being – 1. Leveraging the board’s role as the previously mentioned strategic asset and 2. Enabling the organization to integrate risk thinking and process throughout it’s operating structure and creating ways in which risk can be managed more effectively for upside growth opportunities.

More theory won’t work.

Throwing more consultants at the boardroom won’t work.

And attending a few more conferences won’t get us there either.

In the same way that technology has dramatically changed the way we do business today, innovation has long been overdue in the boardroom.

We believe that time has come.

We invite you to visit www.solomon365.com to see for yourself what a governance platform is and what it can do for your organization.

OK, that’s the end of the sales pitch.   We promise.

Companies committed to both continuous governance improvement and not creating an operating burden value the Solomon365 platform’s practical 5-step improvement process, complete with best practices and straightforward tools/templates.

Companies that prefer to develop internal capabilities—as opposed to relying on third-party consultants—really appreciate the Solomon365 platform’s equipping approach and functionality as a year-round, 24/7 go-to resource.

• Guided Diagnostics – the organization is guided through a 5-step equipping process on any of the Solomon365 modules.  The five steps are – Orient (attend training session), Assess (complete the diagnostic), Analyze (analyze and discuss results), Prioritize (make decisions about improvement priorities), and Improve (create a time-dimensioned improvement plan).  This approach is best suited for those that seek third-party expertise and support to fully equip their organization in the use of the platform.  Note: for this option, IGS recommends that subscriber organizations start with the RiskCoordination and the BoardPractices modules in order to become fully equipped for future self-administration of the remaining board and risk tools and modules.

• Guided Implementation – to help facilitate execution of the desired improvements, the organization is provided detailed assistance with the implementation plans that result from the 5-step equipping process previously outlined.  This assistance will further equip the organization to fully leverage the capabilities and knowledge capital of the Solomon365 platform to drive long-term, sustainable performance improvement.

• Coordinate risk perspectives and processes
• Simplify connections among risk, strategy and operations
• Integrate perspectives of key business monitoring disciplines
• Clarify practices, roles and processes for board, committees and management
• Prioritize a board’s activities and time allocations
• Enhance board relationships and operating dynamics

Unlike traditional board assessments, which typically evaluate individual director or overall board performance but too often have limited impact and effectiveness, the Solomon365 platform elevates this practice in five important aspects:

• Helps board and management assess and improve relationship dynamics that are critical to board performance
• Provides not just evaluation, but a 5-step process that generates clear and actionable plans and improvements
• Lays out practical improvement options in response to diagnostic self-assessments and resulting priorities, allowing an organization to build a customized action plan based on its unique needs and realities
• Offers a suite of board/risk governance tools to help enhance board effectiveness across multiple fronts—board practices, roles and processes; board time priorities and allocations; enhanced relationships and operating dynamics; and risk-informed practices and committee structures
• Provides the option of either a facilitated approach or equipping an organization or team to self-administer the assessment and action plan development.

• Risk modules:
  • Serve as a key resource for those management roles responsible for the risk management process—CFO, General Counsel, Chief Risk Officer, among others.

• Board modules:
  • Serve as a key resource for management roles with primary board interaction—General Counsel and Corporate Secretary, for example.
  • In addition to their use as an equipping resource for management, these modules can be deployed directly with the board—either by an equipped management team, and/or with facilitation by the Solomon365 platform Equipping Team.

• The Solomon365 platform’s integrated Risk/Board module capabilities:
  • Both module sets help management and the board clarify the often challenging intersection of management’s responsibility to manage risk and the board’s responsibility to oversee and advise on risk.

As a “cloud-based” platform, this web-based tool offers subscriber organizations secure, 24/7 access.

• Enhancements, new features and system upgrades are automatically provided to current subscribers for no additional fee.
• A variety of user access levels can be created, enabling broad and controlled use across the company.
• The Solomon365 platform is built and hosted on one of the internet’s most secure, scalable and proven application platforms.

A three-hour basic orientation on the platform is included in the first year’s annual subscription fee and delivered by the Equipping Team of Integrated Governance Solutions (IGS).

Tighter focus:
The board and committees devote their time and attention to the right issues at the right level of detail.

Clearer roles:
Management, the board and its committees are fully aligned and clear on their individual and collective roles.

Integrated perspective:
Monitoring functions present a unified view of organization health.

Enhanced trust:
Board, management and stakeholders strengthen their relations internally and externally.