Board processes, how boards operate and how they reach decisions, are an essential part of corporate governance. While there is no doubt that improving process will improve Governance, directors are frequently asking "How can we get insights into the way boards other than our own operate, and how can we experiment and try out new ideas without putting the business at risk?"
According to David Cartney, a professional non-executive director and chairman of International Business Mentors, the answer is through education programs that offer experiential learning. "Some of the most powerful learning is from the mistakes you make - but in real life directors cannot afford to make mistakes," he said.
Cartney was a facilitator at the AICD's recent Advanced Program, where 24 directors attended a three-day residential course. Participants served on boards and faced a range of challenges which simulated a typical year in a board's life.
According to Cartney, the most powerful learning most participants experienced was around people skills and human dynamics. He argues that to have reached director level you have already had to demonstrate an aptitude with the core skills of financial management and strategy, but developing people skills can be easily overlooked.
John Whittington, MD of Lincolne Scott, and Peter Hamilton who serves on boards for Pinpoint, both attended the Advanced Program. Both agree about the need for strong people skills on a board and the value of this type of program to address issues and trial new behaviours.
Whittington served as chairman of his company, a role he found both demanding and exhilarating, describing it as "an incredibly intense and stimulating learning experience".
"My key insight was how to work with people who are just as clever, passionate and experienced as you are. How to get the most out of everyone and to ensure we all contribute, and to good quality decisions," he said.
Whittington developed a new respect for the challenges of communicating strategy and particularly the need to ensure a common understanding and acceptance of the strategy among board and management. He also got a lot of value from the work around counseling board members to lift performance.
"I have lots of great ideas to take forward which will really improve my business," he said. "I struck gold with the communication and personal counselling. God help the 22 directors who work with me because we will now be using some much more refined models," said Whittington.
Hamilton says he learned a lot from observing Whittington's chairmanship. The way challenges were handled, and the need for due process gave him new insights into the role of the chairman and the importance of selecting and developing a chairman.
"We saw these issues come to life during the Advanced Program, particularly the need for personal integrity and authority without domination - a key challenge in most organisations," he said.
The program also highlighted for Hamilton the benefits of efficient subcommittees and the value they can add to a board as well as the need for both formal and informal discussions.
"I also appreciated how important it is for management to make recommendations to the board. It's easy to provide information for noting, but to be truly efficient, the board needs a recommendation based on a well structured argument," Hamilton added.
The next Advanced Program - from survival to mastery in the boardroom - will be held in April at The Sheraton Mirage on the Gold Coast. Observe a snippet of a board in action at The Outward Journey Company Directors Conference in May.
The purpose of this database is to provide a full-text record of all articles that have appeared in the CDJ since February 1997. It is aimed to assist in the research and reference process. The database has a full-text index and will enable articles to be easily retrieved.It should be noted that information contained in this database is in pre-publication format only - IT IS NOT THE FINAL PRINTED VERSION OF THE CDJ - therefore there might be slight discrepancies between the contents of this database and the printed CDJ.
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