Board directors have traditionally been treated as a governance body formed to monitor operations and provide advice to management. A better approach involves tapping into the wealth of knowledge directors possess and — acknowledging that their tenure is often much shorter than that of a senior executive — working to capture their hard and soft skills in a way that permits long-term access.
For example, board directors and an organization’s management team often have little contact outside of board meetings. This is sometimes culturally driven and sometimes just reflects board directors’ busy schedules. As a result, most directors serve as agents rather than fiduciaries for an organization and its shareholders. To address this, the board chair and CEO (if not the same person) should meet before and after board meetings to work on agendas, discuss follow-ups, talk through issues, and consider opportunities. This process can be expanded to involve subcommittees within a board. Getting a board more involved is one simple way to get it to impart more knowledge (especially tacit knowledge) to the management team.
More frequent interactions may also be possible, depending on how close the board feels it is to the management team or the CEO. Recognizing the board’s fiduciary role, the management team should work to stay more connected, perhaps inviting the board to the organization’s business and social events and functions. This helps the board get to know the organization, management team, and stakeholders better to facilitate knowledge sharing.
Other than seeking advice and ensuring it meets the board’s expectations, the management team should seek connections through its boards. Board directors are business and (perhaps) government representatives in their own right, and many sit on multiple boards. Connecting to board directors’ networks can enhance the management team’s appreciation of the wider business environment and increase access to potential resources and partnerships. Building this type of connectivity widens the organization’s circle of influence and is a major step toward the institutionalization of board knowledge.
The hard skills (technical knowledge and abilities essential for performing a particular job or role) of board directors can often be institutionalized through a staggered approach to board succession. Staggered recruitment and replacement regimes ensure these institutionalized hard skills are retained.
Soft skills (abilities around teamwork, communication, problem-solving, adaptability, emotional intelligence, time management, and leadership) require a different approach. These abilities are embedded within individuals and only surface when board directors share their experiences during board discussions and decision-making processes. Extracting this knowledge relies on interactions with board directors. From an organization-level perspective, this means interacting as groups and documenting discussions to show how boards arrived at decisions.
Organizations should get their boards more involved in strategic discussions — this should not be confined to an annual strategy planning session. Business environments are constantly evolving, so it makes no sense for strategic discussions to take place only once a year. Instead, companies should seek more frequent and deeper conversations with the board about how the organization should look in the near term, the midterm, and further out, including not just challenges but opportunities.
These recommendations are not an exhaustive list of how to maximize and institutionalize board directors’ knowledge, but they are good starting points. Some will work better for your board structure and company culture than others.
Of course, organizations should seek other ways to institutionalize board knowledge that work for both the management team and board directors. Recognizing that board knowledge is a valuable resource that can be institutionalized through relatively simple mechanisms is critical.
[For more from the author on this topic, see: “Institutionalizing Board Knowledge.”]
