The onset of spring in North America heralds warmer temperatures and longer days. When walking through the downtown core, I observe many people moving with what appears to be a greater sense of purpose and lighter dispositions. My clients are smiling more readily and many are commenting on the more positive tones in their offices. This refreshed tenor reminds me of the positive benefits of board renewal, and the discord and lethargy I sometimes see when director development and board renewal is delayed or lacking.

While working with a board recently, I pointed out to them that they lacked diversity. They were all Caucasian, within a ten-year age range, and while they represented a variety of different industries, they all worked or lived within the Pacific NW. Often they held very congenial discussions in which they typically all concurred. This congeniality and common perspective is not preparing them to anticipate unusual and unanticipated challenges. The CEO is also missing out on potentially provocative discussions or innovative approaches.

Signs that your board (and some of your directors) are becoming stale

• Little or no conflict
• Directors gazing at the table or reviewing pre-read board materials at meetings, rather than engaging openly in the discourse.
• Directors display a lack of energy, are lethargic, and their body language shouts, “I would rather be somewhere else.”
• Few or no in-camera sessions. Because there is no content requiring in-camera discussion and/or there is little critical analysis of management or board decisions.
• No term limits or extending directors beyond established term limits
• No maximum terms
• Little diversity around the table – of thought, experience, background, ethnicity or age
• No regular board education

Why does this matter?

Without board renewal and refresh, you face a number of risks:

• A high-performing CEO may feel they are not receiving the professional growth derived from provocative discussion, advice and mentorship.
• The board and management are unlikely to identify strategic shifts that could transport the organization to entirely new markets, products or services.
• While financial results may be acceptable to investors (public or private), there may be untapped potential and an opportunity cost.
• An activist investor could blindside you.
• Emerging technologies embraced by competitors could upend company performance.

Remedies to achieve board renewal

• If your by-laws do not include term limits or maximum terms of at most ten years, add and implement limits.
• Hold an annual strategic retreat. Bring in outside expertise. Ensure they are someone who will challenge the status quo and who will provoke some level of controversy.
• Conduct director engagement surveys and/or interviews on an annual basis. Ask probing questions to ascertain your directors’ level of commitment, the reasons that they are sitting on your particular board, and what suggestions they have to improve the board’s dynamics. Do not accept a response of, “nothing needs to change.”
• Conduct confidential exit interviews with board members.
• Include board education on the agenda at least twice per year.
• If your board is relatively homogeneous, invite guests who reflect a different demographic or ethnicity, particularly if your board complement does not mirror your customer base.
• If you are governing a large company, invite the CEO of a technology startup. If you are seeking expense reduction or better resource allocation, invite the Executive Director of a successful not-for-profit.

Just like the onset of spring after a long winter, board renewal can rejuvenate a stale board. It can create new enthusiasm, allow for fresh ideas, observations, and insights, and positively affect outcomes. Is it time for your board to make some changes?

My clients accelerate their results – increasing profitability, leadership performance, innovation, and accountability. I would love to discuss how I might help you and your board. Contact me today.

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© 2019 Lorraine A. Moore. All rights reserved. Permission granted to excerpt or reprint with attribution.