Magazine article New Zealand Management

AGENDA: 10 Questions for Boards

Magazine article New Zealand Management

AGENDA: 10 Questions for Boards

Article excerpt

Byline: Roger Branch

Many company board meetings fall into a predictable pattern of procedure-driven activity, with excessive time given to reports from the audit, compensation, transactions, and other committees. Even in todayCOs Sarbanes-Oxley and liquidity-focused business climate, boards often make the mistake of focusing too much on governance and not enough on strategy.

The 10 questions below are designed to help you energise your next board meeting and focus on the strategic issues that are vital to driving the best possible long-term performance. They are divided into two groups Co three governance related, and seven strategically related. While a one-size-fits-all solution does not apply to all boards, using these questions should help you to focus your board meeting on the things that really matter so that the board is truly adding value.

Governance Questions

1. What is the dashboard telling us? The dashboard should provide you with key financial and stakeholder metrics so that you have the key health and trend measures for the business from the angle of customer, employee, investor, and other key stakeholders. You need to make sure that you have good data, unfiltered by management, so youCOre not making ungrounded assumptions or decisions based on faulty premises. Consider a balanced scorecard approach so youCOre not focused solely on the numbers.

2. Do we have Cysmoke detectorsCO in place? Part of good governance is preventing major problems. It is well worth a regular review to determine that your early warning systems are in place for key issues such as liquidity, product and legal liability, ethical violations, information security, development and project risks, and people risks.

3. Do we have the right board composition? The board should ask itself if it has the right composition of skills and knowledge for where the company aspires to be in three years. ThereCOs no substitute for the C[pounds sterling]been there done thatC[yen] factor, when it comes to acquisitions, offshore expansion, funding, or anything else.

Strategic Questions

4. WhatCOs changed since our last meeting? While you donCOt need to perform a full-blown SWOT analysis at each meeting, itCOs crucial to recalibrate, especially around changes in competition, economic factors, customer preferences, and technology, and how these changes affect the business.

5. Do we keep the CEO? Consider whether, if the current CEO were applying for the job today, you would hire them. You want a chief executive (and management team) that is geared to where the business aspires to be in three years, not where it is today. …

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