Boards that evaluate grow. Board’s that don’t evaluate, stagnate.

By Jaime. Grego Mayor - Co- Founder at Boardology

Like everything in a company (and in life, I guess), boards change and evolve and if they don’t they lose their alignment with the business.

💢 Recently two of the boards I run have begun to evolve as a result of the evaluation process. Both started a few years ago as pure advisory boards where the main focus was providing guidance and advice and generating accountability over key strategic initiatives. Over time, as the companies and, importantly, the stakeholders, have evolved, so have the objectives of the board.

*️⃣ In one instance a new, non shareholder CEO has taken over. In another, a generational transition (from Generation 2 to Generation 3 in a family business) is getting closer.
*️⃣ In both cases, shareholders have asked the board, which continues to be an advisory board to take a more proactive role, incorporating some elements of oversight and decision “vetting” that were absent before. 🗯

✅ This has been done without reducing the impact of the board.
In fact, our per-meeting evaluations actually show an increase in engagement and strategic value creation.
✅ Importantly, this has kept the board aligned with the companies’ strategic moments: the set of internal and external factors, current and foreseeable, which affect a company.
In one case the shareholders wanted to ensure increased accountability and oversight of a non-shareholder executive, in the other the shareholders want to deepen the business governance structures in order to ensure the continuity of the family business when the transition from G2 to G3 happens.

❇ Both these initiatives were born from evaluation processes. The per-meeting evaluation and the annual or bi-annual evaluations of the board offer all involved the opportunity to reflect on board performance and, especially in the annual evaluations, to consider the long view - and then act upon it.
➡ For example: does the change in objectives merit changes in how the board is structured (advisory or BoD? Need for committees?)? Are the right people sitting at the table to help us meet the new objectives? Should some topics necessarily come to the board? Should we meet more/less often? Etc. ❕

✳ Having an “evolution mindset” keeps all involved alert to the board’s alignment to the company’s strategic moment and considering if there is more we can do to create value. This allows the board to lead events, rather than lag behind them. ❗
To evolve and not stagnate. ❗