SIRDAR
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Five Ways to Boost Boardroom Dynamics

Effective boardroom dynamics are crucial for the success and strategic direction of any organisation. A well-functioning board can drive innovation, ensure accountability, and provide valuable insights, while poor dynamics can lead to stagnation and conflict. 

Leverage these five ways to boost boardroom dynamics – based on Contribution Compass and the Sirdar Governance Compass – and improve performance.

Ensure Diverse Composition

A board that encompasses a diverse range of skills, backgrounds, and perspectives is more likely to approach problems creatively and make well-rounded decisions. Diversity should extend beyond professional expertise though and include aspects such as gender, ethnicity, and age.

The Contribution Compass model, which categorises individuals as Catalyst, Champion, Coach, and Conductor based on their natural energies and strengths, highlights the importance of having a mix of personality profiles to enhance board dynamics. The Sirdar Governance Compass also emphasises the need for diverse and balanced boards to drive strategic success.

The benefits of improved board composition include:

  • Enhanced problem-solving and innovation.
  • Broader understanding of market and consumer needs.
  • Reduction of groupthink, leading to better decisions.
  • Improved financial returns: According to a 2020 McKinsey report, companies with higher diversity are 35% more likely to have financial returns above their respective national industry medians. 

While improving diversity isn’t a quick item to achieve on a to-do list, it can be supported by:

  • Recruiting members with varied professional experiences.
  • Promoting diversity in gender, ethnicity, and age.
  • Using tools such as Contribution Compass to understand how to balance natural energies on the board.
  • Regularly reviewing board composition to identify and fill gaps.

Clarify Roles and Responsibilities

Well-defined job descriptions and a clear division of duties between the board and management support good board dynamics. Furthermore, regularly reviewing and updating roles and responsibilities, and leveraging Contribution Compass to align members’ natural strengths within their roles reduces overlaps and conflicts, and ensures that each board member understands their specific contributions. The result is:

  • Increased accountability and efficiency.
  • Streamlined decision-making processes.
  • Improved strategic planning: A Harvard Business Review study showed that boards with clear roles and responsibilities are 28% more effective in strategic planning.

Communicate Effectively

Open and effective communication is essential for building trust and collaboration within the board. In fact, according to the Institute of Directors, boards that prioritise open communication are 34% more likely to be effective. 

This is achieved by:

  • Encouraging open dialogue, actively listening, and providing constructive feedback during meetings. 
  • Utilising modern communication tools to facilitate better interaction and information sharing among board members e.g. video conferencing, shared online platforms, and messaging apps.
  • Fostering an environment where all members feel comfortable sharing their views.
  • Scheduling regular informal meetings to build rapport among board members.

Effective communication leads to improved trust and collaboration, enhanced information sharing and transparency, as well as better decision-making through inclusive dialogue.

Train and Develop

Board members should continuously develop their skills and knowledge to keep up with industry trends, regulatory changes, and best practices. A survey by Deloitte found that 78% of high-performing boards engage in regular training and development. 

This is easily achieved by:

  • Leveraging workshops, seminars, and courses relevant to the board’s work.
  • Attending industry conferences and networking events.
  • Accessing resources such as industry publications and online courses.
  • Using Contribution Compass to tailor development programmes to individual strengths.

If your board wants to see its members improve their expertise and knowledge, increase engagement and motivation, as well as make more strategic decisions, then training and development are key.

Leverage Evaluations and Feedback

Regular evaluation of the board’s performance helps identify areas for improvement and ensures that the board remains effective. According to PwC, 63% of directors believe that board evaluations are critical for improving performance. This can be done through self-assessments, peer reviews, and external evaluations. Providing constructive feedback based on these evaluations can drive continuous improvement.

Sirdar’s board evaluation and diagnostic methodology highlights the importance of using both quantitative and qualitative insights thereby also understanding context beyond content.

Ensure that you conduct annual self-assessments and peer reviews, engage external providers for an independent and objective view of the board, create action plans based on findings to address weaknesses, and integrate Contribution Compass insights to understand individual and collective performance better.

Doing so supports continuous improvement of board performance, prompt issue identification and addressing thereof, and increased accountability and transparency.

Conclusion

Boosting boardroom dynamics is essential for the effectiveness and strategic success of any organisation. By fostering diversity, clarifying roles, enhancing communication, promoting ongoing development, and regularly evaluating performance, boards can operate more efficiently and make better decisions. 

Relying on Sirdar’s robust methodology and incorporating Contribution Compass further enhances these dynamics, ensuring that board members’ natural strengths align with their roles and responsibilities. 

Implementing these strategies will not only improve board dynamics but also contribute to the overall success and sustainability of the organisation.