The effectiveness of the board of directors can be traced to three key areas. First, the exchange of information. Secondly, discussion of matters of importance. And thirdly, working cooperatively, both as a board and with management. In this lesson, we're going to explore each of the three board leadership roles that support these areas of excellence. In our introduction, we described these board leadership roles as the informer, conductor and facilitator.

Let's begin with the board leadership role of informer. information shared between management and the board builds trust. And establishing and maintaining credibility is a paramount importance But sadly, I've encountered far too many situations where this was absent. The board needs information that educates and immerses them in the business and the external context without burying them. information must enlighten directors about How the company makes money both in the short and the long term in plain easy to digest language. This includes information that allows the directors to monitor the operating performance of each of the various business units and of the whole.

To demonstrate progress performance measures are established to objectively confirm execution of strategy. This inside out, understanding enables the directors to make a valuable contribution to strategic management, which leads us to the second role. Let's talk about the board leadership role of the conductor. The face to face time that the directors spend together is extremely valuable. The list of discussion matters that appear before the board typically fall into one of these five buckets and typically Rick and importance has presented urgent matters often require a resolution or a decision of some sort. It could be an acquisition, a new financing, the purchase of a new facility, or an event requiring a special disclosure considerations such as a disaster, when urgent matters arise typically boards will convene special meetings to deal with it.

People if 60% of our corporate performance is determined by having the right CEO succession plan, shouldn't we spend more time talking about this? This should include discussions about CEO performance and assessment of the depth of the leadership pool. conversations about the CEO are typically held in camera between various directors, which is to say in private. Then the assessment findings shared with the CEO by the lead director, and we'll talk about this more in lessons to come. A third item for the board discussions pertains to strategy matters. Strategy discussions are important to have because they give the opportunity for the boss to contribute to the direction of the business, as well as provide context for monitoring results.

The conductor ensures that the strategic agenda isn't left entirely to manage And then it gets integrated through the various meetings with the board. separately. A special and separate planning meeting is often a good way to structure a strategy development session with the board as we'll look at more in a later lesson. The fourth and fifth items on the list are the operational effectiveness and compliance matters. The informer role will leverage the conductor role to ensure that the board receives the right balance of written reports and verbal updates. As much as possible we'll use time outside the boardroom to address items pertaining to monitoring past performance.

The tools at our disposal are the board books, flash reports or other ad hoc reports, which can be used to provide updates without the need for board discussion. This too is of such importance that we're going to also cover this in a later lesson. So the conductor roles keeps each of these areas of business in mind and carefully structures the conversations wants to maximize the utilization of the discussion time to matters of highest value. The third board leadership role is the facilitator. group dynamics between the directors and between the board and management need the right facilitator to guide discussion to productive outcomes. The challenge with any board is that there's only a loose hierarchical structure.

The directors rely on the board chair or the CEO to orchestrate the meeting. But beyond that, all directors are equal. Not only are they equals, but recall that these are typically highly qualified and talented group of individuals. So finding the right way to work together and in a cooperative manner is of paramount importance. The ways in which group dynamics fail to achieve the highest result happen for any number of reasons consider some of the following situations. Firstly, when you have one or more dominant directors that tend to hijack the discussion and impose that views on the group.

Secondly, consider where you have directors that express a dissenting view, but they express it in such a way that destroys trust and teamwork. Thirdly, consider a situation where a director is permitted to go down a rabbit hole into an issue of insignificance and take up the board's precious meeting time and management's attention. In each of these situations, the board's ability to add value and progress thinking is diminished. It's the role of a strong facilitator to recognize when the group dynamic is being eroded. It takes a strong facilitator to ensure that a balanced discussion is achieved, and that the views from all directors are heard in productive ways. That takes us strong facilitator to move a group towards consensus such that a motion can be made and a vote taken on the matter to decide.

Now this is really hard to do. And one idea for enhancing participation and soliciting the widest scope of thought on particular matters. of importance is to have groups subdivided themselves into smaller work teams. by teaming up a couple of directors with a couple of members of management, more ideas can be shared and put on the table. When the board reconvenes, each team can report back on the most important considerations raised in their discussion. This approach has been proven to allow for a much deeper and efficient discussion on board matters.

This is another reason why many boards will subdivide their mandate into board matters and committees. Another best practice for boards to complete is a periodic self evaluation. Many companies will have some sort of process in place as this is mandated by regulation. However, what is more rare is what is done with those self evaluation forms. And let's consider a couple of ideas to strengthen this self evaluation process. And the first is to make the self evaluation and agenda item for discussion.

Again, the right facilitator is invaluable for this discussion. Each director should be To contribute their own ideas for improvement of the board function, the session should be conducted in a more open brainstorming fashion, rather than a narrow critical evaluation. The suggestions can be later vetted by the chair and the CEO if need be to determine what new governance practices might be adopted. A second idea is to have directors perform a peer evaluation. The idea is to help directors improve their own level of self awareness. And once again, the facilitator role is of the utmost importance.

And in fact, this might be best done in conjunction with a third party to ensure the personal attributes of the feedback are separated from the constructive feedback that might have value. A third approach might be to have each of the directors complete a personality profile using tools like disc or Myers brigg. Understanding and recognizing different personality profiles has been shown to help improve your own self awareness of tendencies and blind spots as well as recognized The tendencies of other profiles. The profiles are easy to do. And spending an hour or so every couple of years doing an activity like this can greatly enhance the effectiveness of discussions during all future board meetings. Each round of self evaluation and improve self awareness should hold the group dynamics a little more each time.

And as the board gets better at this, they may choose to follow a less intensive approach over time, but particularly for a new board or a board with a lot of new members. This sort of approach can help the board gel as a team. So the role of facilitator is of crucial importance for ensuring that the board functions as a cohesive group, the facilitator role ensures that the thinking and discussions get magnified and not diminished. In this lesson, we talked about three really important board leadership roles, some of which fall on the shoulders of the CFO, the former role most certainly qualifies in that regard. The CFO is the keeper and messenger of information to the board. how that information is assembled and circulated has a pervasive impact on the effectiveness of the board.

The conductor role is one that structures the activities of the board, it's easier to talk about what is known such as operational results, but when such discussions are just updates, they tend to offer lower value. Ideally, the conductor structures the discussions in such a way to allow the board to discuss matters of strategic and leadership importance. Thirdly, the facilitator role recognizes the importance of group dynamics on the effectiveness of the board. The right facilitator manages the productivity of the board discussion and ensures that the best thinking emerges and that broadly based consensus is reached on important matters. And the lessons that follow we're going to dive further into each of these three board leadership roles to further governance advantage.