At their best, Boards of Directors sharpen, challenge and enhance a company's best strategic thinking. But according to a recent McKinsey study the best boards invest a significantly greater amount of time in their work than do lower performing boards. Members of the highest impact boards spend 21 days a year more working on their board's behalf than do the members of moderate or low impact boards, spending 8 more days a year on strategy alone. For people as busy as board members tend to be, that is an enormous difference.
If you are the leader of an organization and you want to ensure that your board helps you build the best organization possible, you need to think carefully about the implications of this study.
Board members were asked in this survey how many days they would ideally spend on their duties. It comes as no surprise that the members of moderate and low impact boards thought that they should increase the number of days they spent per year and increase it from 19 to 27. Interestingly, the members of high impact boards also thought that it would be best to increase the number of days they spend working as board members, suggesting adding five days to put their ideal total at 45 days per year.
Even members of high performing boards feel that they can increase their contribution to their organization if they spend a bit more time doing it, which is an extremely valuable insight for a leader of an organization to have. As a leader, there is always a worry that you are taking more time from your board than they really have to give since the vest majority of board members are incredibly busy people. But, given the chance to be productive and helpful, board members will give an enormous amount of time to help you.
Notice, also, that the best boards spend the same amount of time on the core governance and compliance functions as do the moderate and low impact boards, each of them spending 4 days per year on the subject. In all other areas, the high impact boards are spending more time than the moderate to low impact boards. As you think about managing your board, it is important to think about how you can maximize the time that your board spends on high impact topics, like strategy, performance management and M&A. One way to do that is to make the time spent on governance and compliance as efficient as possible.
And, speaking of efficiency, let's not forget the large amount of prep work required to make 40 or 45 days of board work productive for your members. If we use the rule of thumb that teachers and professors have been using for years, that it takes 2 - 4 hours of prep time to make best use of an hour of classroom time, then you are looking at spending between three and six man-months each year prepping for your board interactions, on top of the 45 days you will be ideally spending actually interacting with your members. Before you know it, you are spending more than half the year with your board, leaving precious little time to actually run your organization and execute the initiatives you've been talking with your board about.
But, if being a leader were easy, anyone would do it. There are ways, however, to make managing your board easier. These range from board portals (like we provide here at iBoardrooms) to dedicated staff to work with your board, to simple things like ensuring that you don't reinvent the wheel every time you create a board presentation (reuse those PowerPoint templates, that's what they're for!). But whichever set of tools you choose, be sure to select the right ones for your organization.
The value that you can unlock by making your board a high performing contributor to your organization is enormous and it starts by streamlining the time your board spends on what you have to do so that you can spend time on the things that really move the needle. You'll be surprised how willing your board members are to contribute meaningfully if you ask them to pitch in on matters that are strategically important.