Is 2017 a good time for directors to feel rejuvenated with a new year ahead?
In 2017, boardrooms will face a long list of challenges ranging from merger/acquisition activities, regulatory compliance or dealing with global economic issues.
Another key issue for directors on the agenda in 2017 should be wellbeing and productivity. All directors need to feel engaged and energised by their roles. They should always look forward to them coupled with being physically and mentally capable of performing at a high level for long periods.
The governance debate is almost always dominated by legal or regulatory issues, executive pay, corporate performance and board composition matters.
The human side of being a director is often ignored. Director wellbeing is often taken for granted. They are often well paid therefore hard work, complex challenges and stressful situations are part of the deal when you are a director of a listed company in New Zealand. Overall, governance cannot be that bad, given the growing interest in directorships from many individuals.
I meet with directors and boards on a regular basis and one trend that stands out is the growing number of professionals who seem tired and a bit flat resulting from for example, heavy workloads, higher compliance requirements, increased personal liability.
These and other areas may have left more directors wondering if their hard work is worth it.
Many directors believe that the level of red tape and the time spent by the board on regulatory compliance had increased over the past 5 years. The level of compliance activities may have a negative effect on their business decision-making and willingness to continue on a board or even willingness to accept new board appointments.
Best practice would be for boards through the Chairman to conduct an annual board review and the occasional fireside chats to sense emerging personal or professional problems, or blindly expect those who no longer enjoy the role will retire.
Let's ask ourselves as a board this year the following questions:
"Is our boardroom energised?"
Do directors prepare for, and attend, meetings with a passion to learn about the organisation, ask difficult questions, constantly test management assumptions, safeguard stakeholder interests and act in a collegial way?
Many directors believe that the level of red tape and the time spent by the board on regulatory compliance had increased over the past 5 years.
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Are our board meetings interesting and highly productive? Have we streamlined procedural matters, reduced the number of long management presentations and used technology to improve efficiencies?
Can we change the meeting format or location to liven things up?
How do we free up time to focus on issues that add most value?
As directors, we are seeking to grow our knowledge through professional development. Having a professional development plan is important. Attending conferences or courses to build sector knowledge is very useful. Meeting more people in the organisation and visiting all the office locations is a good idea as well.
We should think about creating a highly professional environment, but still celebrate small wins, recognise exceptional work by directors and enjoy each other's company, inside and occasionally outside, the boardroom.
In 2017, it would be great to see boards lift director productivity by creating an environment where directors strived for higher performance, not because of role expectations, legal risks or other compliance issues, but because they love their work.
In the end, try to spend a little less time on policy and process and increase your time spent on people. The result should be an increase in board performance.