Here’s an understatement: Uber is flawed. It has posted more losses than any tech company. Ever. On top of that, Uber’s public image has been dragged brutally, but not undeservingly, through the mud for the last several years. That said, they have more than a little wiggle room. Uber has raised more money from investors than almost any other tech company and, in December of 2018, they filed for an IPO which, some have predicted, may see the company valued at $120 billion. They have some room to mess up.Continue reading
The KonMari Method and Your Board
If you have Netflix, you’ve probably heard the name “Marie Kondo”. If not, there’s a good chance you’ll soon encounter Marie Kondo and her book, The Life-Changing Magic of Tidying Up. The KonMari Method has taken the cultural zeitgeist by storm. But do the lessons of Ms. Kondo carry weight in the boardroom? Let’s talk about it.Continue reading
Fishbone diagrams, also known as “Ishikawa diagrams”, were conceived by organizational theorist Dr. Kaoru Ishikawa in the 1920’s. Today, they’re used in the analysis phase of SixSigma’s DMAIC problem-solving method. The diagrams focus on identifying the “root cause” of an “effect” (an issue or problem).Continue reading
Many organizations view board member peer reviews as one of the most relevant ways to gauge effectiveness and to work to change any negative behaviors occurring in the boardroom.
Peer reviews can, however, be very tricky evaluations to administer since they carry a strong element of critique. While yearly board evaluations are required for all NYSE-listed companies, peer reviews are not mandatory.
Before choosing to implement peer reviews, board members should discuss the potential value that they would bring to their processes. Then, the chairman can make the decision to implement peer reviews as needed.
If your board does feel that peer reviews will provide significant boardroom insight, here are four suggestions for how to go about administering and utilizing them.
Send a post-meeting survey
Send a brief survey after meetings. This 3-5 question survey should ask directors to rate their experience of the board meeting.
Use this opportunity to determine whether board members feel that the agenda was adequately covered and if they have suggestions for future meetings.
It’s important to send the survey shortly after the meeting while the details are still fresh on directors’ minds. (A yearly, more in-depth survey is also a boardroom must.)
Distribute the meeting minutes
It’s important that board directors can quickly and easily review the meeting minutes for accuracy. Board software simplifies this process in a big way and encourages more involvement from directors. Create a clear process for editing the minutes, so board members can follow the time frame.
Outstanding board members certainly don’t grow on trees. In fact, finding the right group of business leaders to impact your organization for the better is a true challenge.
Not only must you consider individual fit and ability, but also how the group will work together. Here are some tips to help you tackle this undertaking in pursuit of exceptional corporate governance.
Think strategically about the organization of your board
Before you can expect directors to think strategically about your organization’s future, you need to think strategically about your board. First, take some time to consider what size board makes the most sense for your organization. Perhaps you’ve been operating with 7 members, but changing to 9 members makes sense for tactical reasons.
Don’t choose a number at random; be sure you can back up the decision with consideration and research. Next, update your board member job descriptions. Make sure that the expectations for directors are clear. You can’t anticipate success from anyone unless you’ve provided them with an outlook for their role.
Marketing and communications professionals, however, have remained on the perimeter of boardroom involvement. But as news and PR cycles continue to grow more powerful, invasive, and easily accessible online, it’s high time for boardrooms to embrace their media-savvy peers as vital corporate leaders.
Just ask United Airlines. In the wake of their current PR nightmare (which involved dragging a man off one of their flights), their CEO released a statement that came across as tone deaf to many readers. Not to mention, United Airlines stock has dropped $1.4 billion in the wake of this crisis.
Combine this event with the recent confusion over two teens who weren’t allowed to fly wearing leggings, and you can bet that the United Airlines’ board isn’t having a very good couple of weeks.
It’s not a death sentence, though. A disengaged board is not beyond repair!
In fact, here are some tips for reviving a disengaged board and getting on the path towards a high-functioning and involved leadership team.
Set clear goals
Many leaders are deadline-oriented and need extremely clear objectives in order to know how much effort they need to exert to meet or surpass expectations. Don’t be afraid to set high goals, so your board members feel the push to excel.
Every board meeting is different; in fact, a meeting that’s relatively dull and discussion-less might follow a meeting comprised of contentious and heated debate.
There isn’t a “right” kind of meeting, but there are some ways to help ensure that you’re getting the most out of your in-meeting conversations.
Don’t avoid disagreements; give them a structure
Many individuals are conflict-averse, but the truth is that board meetings sometimes demand that two sides state their cases for different paths forward.
Some of the best boardroom discussion can come from a debate-style format, but that’s the trick—the moments of disagreement should feel heavily controlled like they would in an actual debate competition.
In other words, set time limits for laying out arguments. Give individuals a structure that ensures balanced speaking time. When directors feel as though they have an equal opportunity to speak, it’s easier to focus on the topic at hand rather than on potential unfairness.
The foundation of a board member’s service is their fiduciary duty to shareholders. Before we jump into what kinds of duties are involved, let’s look more closely at the word “fiduciary:”
fiduciary (adjective): involving trust, especially with regard to the relationship between a trustee and a beneficiary.
It’s a word that we hear a lot in the corporate world, but its basic meaning often gets overlooked. Simply put, the word fiduciary is all about trust, and that’s exactly what’s required of directors under corporate governance law.
The Three Types of Fiduciary Duties:
The Duty of Care
According to Investopedia, the duty of care “applies to the way the board makes decisions that affect the future of the business. The board has the duty to fully investigate all possible decisions and how they may impact the business. Because a company’s board of directors is tasked with making very important decisions, it is necessary that each member takes each issue seriously and adequately considers all options.”