There are basically three ways that boards operate that are familiar to dairy farmers. First there are the ceremonial ones that largely rubber-stamp whatever the CEO wants. Then there are the traditional boards that try disjointedly to attempt to influence. Finally there is the progress board that is comprised of a group of experienced leaders who add value. I have no doubt that you have experienced at least two of these three main board types.
We all give lip service to the fact that we would like to have the highest performing boards leading our dairy associations. Are we successful? A quick check of how we put board members in place might hint at a less than performance-oriented selection process. Boards are only as good as the directors that sit on them.
To my mind, a healthy board is one where there are numerous potential candidates eager to lead. Healthy boards have a rigorous nomination process and, after the directors are in place, there are periodic checks of board performance and, more and more frequently, peer evaluations. Do these steps sound familiar? Probably not.
There was a time when members were face to face with board directors often enough to have a real idea of their position on issues and ability to deal with them. Boards today often cover much larger geographical areas and rely on electronic reporting.
Nothing is more disappointing then having the opportunity to vote on qualified candidates and then discover the individuals can’t, won’t or don’t deliver as expected.
After all, this isn’t like government (or we say it isn’t) where the expectations are already low and there is skepticism. But on most dairy boards the directors are our friends and peers. They’re nice. That’s the conundrum. It would be easier to accept if they were grumpy, snarly and complete strangers. That NOT being the case , we are faced with living out our disappointments when we realize that the change we hoped for isn’t going to happen or, unfortunately, the problems are getting worse.
Sometimes we need to identify the root problem that causes some directors not to grow. That problem is often a loss of passion and enthusiasm on the part of members of the Board. For whatever reason they either didn’t have or have lost their spark. An effective board is composed of people who have real excitement for the work of the organization and can sustain that excitement. Of course, that’s easier said than done.
If only we were able to build good boards from the get-go! Clearly, the framework of the board as a whole, and of each director, is paramount. The stakes are even higher when selecting directors today when the talent pool of people who are willing to accept new directorships is shrinking while the need for effective decision making by dairy organizations is becoming even more crucial. At the very least, the board as a whole needs at least eight competencies represented by several directors: business judgment; general management experience or perspective; finance; industry knowledge and trends; leadership; international markets; strategic thinking ability and crisis management expertise. Depending on the organization, the threats and opportunities may require more depth in some of these areas than others.
Plank by Plank the Board Platform is Built
With the right people in place it is imperative that they know what their role is. It is far too easy for Board members get bogged down in the administrative details. After all, many of them run their own businesses. They are comfortable with the details. However staff focus is on the details and the Board focus is on vision, policies and financial oversight. There are three main areas that every board member should be aiming to contribute toward.
- Lead domestically, collaborate globally. (Even national or local Boards must keep the global picture in mind).
- Innovate continuously for a sustainable future
- Inspire the next generation
We need to raise our expectations. For the sustainability of our industry, boards need to become more results oriented. And we as members need to hold them accountable. Too often we see Boards getting mired down in the administrative details that should be left to staff to carry out. It is the vision and policy (and of course finances) that are the concern of the Board. A strategic plan with measureable outcomes and assignment of tasks is the main work of a Board. It doesn’t end there. It needs to be dynamic. The biggest weakness of any Board occurs when they do not have an “ACTION” agenda that is reviewed, revised and put in place.
Tracking Open Action Items is key to Board effectiveness. One of the first indicators that an organization is struggling is that open action items are not tracked and reviewed. (Open action items are required actions that have not yet been completed.) Instead, directors only see and react to the latest “fires” that are presented around the board table. Whether open action items are critical to address now or not, they should not entirely be forgotten.
Tracking Board and Chief Executive effectiveness is also key. Too often (especially if there isn’t a crisis) there isn’t a procedure in place to evaluate BOTH roles. Quite often boards just go through the motions. In the end this could weaken the entire structure of the organization. Commitment comes from having a stake in the outcome.
Silly Board or Bored Silly?
With decades of board experience, I no longer have the patience for what I term” silly agendas”. It’s frustrating to commit time and energy to find that you are merely required to rubber stamp the agenda of the CEO, Staff or a particular interest group. In those cases, it might have been more honest to send out a report, ask for an email vote and have the vote sent in.
When you are not actively involved, another weakness can take hold— the “numb out” factor. One of the first signs that a board is in trouble is when members have opinions that they don’t express during meetings. If you find yourself sitting in a board meeting and realize you have “numbed out”, then you’re not doing your duty as a board member. Effective boards guard against this by providing full backgrounds to directors at least a week before each meeting. One of the clearest indicators to board members that the organization is not taking them seriously is if they don’t get materials in time for adequate review before board meetings. Committee reports, action reports, financial report and materials that can help board members act on any major decisions should be available before decision-making is required.
Once directors are fully informed the entire board should be invited to comment. Really invited—not just presented with the rote question, “Is there any discussion? Whenever there’s good dialogue and everybody feels like their opinions are valued and that it’s okay to open their mouths, that’s when progress will be made. Directors should get their work done in between meetings not in between agenda items as the meeting is progressing. Good director research will be brought to the table. Good information will form the basis for discussion. The board will be aligned and involved and transparent. This is the kind of Board that makes a difference to the industry.
In all of this discussion we mustn’t forget to ask, “What is the role of the membership?” Regardless of the people and the goals of the Board, unless the membership is engaged no progress will be made. The work of the Board doesn’t start and end at the Board table. There must be commitment to keeping open, transparent communication with the membership. And the membership is responsible to keep it going both ways. Support works best when it comes from both sides.
The Bullvine Bottom Line
A healthy board process creates dynamics in which everyone is engaged and listening, adding value, supportive of open and authentic exploration of ideas and participating in balanced ways. You know you have the right directors in place, when they are providing the membership with a springboard to a sustainable dairy future!