Take Away Line
There are plenty of examples of where boards may fail to spot the big shocks that will have a significant impact on their future success, the bank crash and Brexit being just two examples of potentially existential threats to organisational viability that many organisations in the UK failed to model. But the point isn’t that boards should become fortune tellers; rather it is that they are in shape to draw the best from each other’s skills and perspectives in order to reach a balanced view about what might be out there and how they may best respond.
But being in shape as a board isn’t just about the big shocks, important though they may be; it’s also about just being good at the governance job. So many boards don’t know how effective a job they are carrying out. BoardsCount Panorama has been designed to address this question time efficiently and at low cost.
Brexit and Boards – yes, there is a link!
Having gone through a harrowing few months, one large housing association’s board gave (along with the executive team) a collective sigh of relief at the end of a long board meeting. They had just approved a new business plan, developed at short notice, mainly to incorporate the last UK Government’s unexpected decision to cut social rents, but also several other ‘out of the blue’ shocks to their social business income stream.
After a lot of late nights and weekends by the senior executive team and supported by the board, they felt they were back on an even keel, at least enough so that they could begin to think afresh from a baseline of greater financial viability. Now was the time to being to reset the compass, perhaps think about mergers, perhaps think about other new growth ideas that had been in abeyance over the previous few months.
As we were parting – I was there at the beginning of an external governance review process – I mildly asked the Finance Director, Chair and Chief Executive who were standing in a little knot in the board room chatting, if they’d thought about Brexit and its possible consequences for their business plan. An awkward moment’s silence, then a quick no.
I had the sense that the FD may well have gone home pondering that one, but that little modelling would have been carried out subsequently. A few weeks’ later, I had the same experience at another board meeting of another large social business client. My sense is that these are not isolated examples.
Uncertainty seems certain
Regardless of whether these two external shocks to a business organisation – unexpected rent reductions (ie a major income cut) and the fundamental change in the business landscape following the Brexit shock – could or should have been foreseen, they illustrate the extent to which business life in general and the social business world in which I tend to inhabit in particular, is not only uncertain, but uncertain to a degree that is existential. Such shocks can and do have a fundamental impact on the viability of the organisations in question. They can leave an organisation reeling.
There is no argument here that boards should now suddenly develop skills of clairvoyance. But these examples perhaps point to the need for boards’ levels of vigilance to be super-high and for their antennae to strain even harder for what may be about.
Getting in shape for uncertainty
And, of course, boards may get it wrong. I recall at one board meeting a few years ago, where a particularly economically savvy board member predicted the imminent demise of the Euro and its likely impact on their very large social business. Meanwhile, another voice tempered that view with the thought that the Euro was politically too important it to fall, even if economically it may come close. The point isn’t whether people get it wrong or right; rather the point is twofold:
- that boards are taking time to have these kinds of conversations – which are often called ‘generative’ conversations, and
- that boards are making sure they are in shape so that they can draw the best out of each other and come to a good, balanced judgement about what are inherently problematic things
Governance reviews made simple?
Since the buck stops with the board itself, the only source of data to check in on these ideas are the board members themselves and those who work most closely with them, the directors, if they are not themselves also board members.
So, to ensure that a board is providing the leadership that its organisation needs, it should check in on itself from time to time. And yet, while this is something that many boards know they should do, they often just don’t get round to it. It can feel awkward. And it can feel like it’s a big job, perhaps for little material gain.
It’s to address this challenge – helping boards assess where they are, in as short a time as possible – that BoardsCount Panorama has been developed.
Discover more on our new BoardsCount Panorama website pages.
- Do you have the means to ensure that you know how well your board is doing?
- Could you do that better – more efficiently? In a more cost effective way?
Interested? Why not check out BoardsCount Panorama here?