Every day, leaders are waking up to fresh concerns in relation to macroeconomic volatility, geopolitical tensions and regulatory change, all of which emerge at breakneck speed. In the middle of all this, executives are trying to run their companies and drive higher performance.
The role of the Board in supporting management teams to make effective decisions within this maelstrom was discussed in depth at Criticaleye’s Leadership Retreat, held in Partnership with
AlixPartners and
Stream.
For
Shefaly Yogendra, Non-executive Director at Fidelity Emerging Markets and a Board Mentor with Criticaleye, an effective Board is about much more than just having the right composition of industry know-how and broader experience. “I think one of the key roles of the Board in this current situation is to be the voice of sanity and the voice of calm.
“Boards should be looking at character and temperament far more than looking at only the skills and experience,” she continued. “So can somebody remain calm when everybody is losing their heads?”
The ability to remain cool under pressure and make the right calls is only possible if Boards have spent enough time together working on the strategy, according to Shefaly. “You can't make decisions in wartime if you've not spent peacetime shoring up the clarity of your mission and … objectives, and knowing what direction you want to be pulling towards.
“Effective decision-making is about reinforcing the clarity of mission, clarity of strategic goals and then providing all the support possible for the execs who are trying to wade through all of the chaos.”
It falls on the shoulders of the Chair and non-executive directors to ask the right questions when necessary so the executive team can reflect on issues in ways they may not have by themselves.
Francesca Ecsery, a NED at Haffner Energy and fellow Criticaleye Board Mentor, argued: “You have to make sure you have lively discussions, that you plant an idea and then you build that out. It could be over several meetings, [but] the key is to be able to influence decisions one way or another without having to walk all over the flower beds.”
This isn’t to say that the non-executives should have carte blanche to exert full control over how and what decisions are made in the Boardroom.
Giles Andrews, Senior Independent Director at C. Hoare & Co, noted that the Board makes decisions collectively, although “the CEO has to have a very clear input and a very clear recommendation”.
He continued: “I don’t think the Board should ever be asked to make a decision that doesn't come with a recommendation from the management team. Otherwise, I think there's a significant vacuum. Decisions generally, in my experience, shouldn't be very contentious. I can think of, in 10 years on Boards, one decision that went to a vote, and I think that was one too many. I think decisions should flow naturally from the discussion.”
Francesca agreed that the responsibility for decision-making is collective across the Board, but reinforced the integral role played by NEDs in tying various elements together and keeping senior leaders honest: “We need to influence decisions; we need to make sure that risk is properly understood; we need to challenge assumptions and we need to hold management to account for delivery.”
Picking up on the importance of having an adept Chair who can oversee the entire Board structure and manage different personalities across the table,
Charlie Wagstaff, Managing Director at Criticaleye, said: “A good Chair is like the conductor of an orchestra, bringing together different voices, perspectives and talents to create harmony and deliver a shared ambition.
“Working in close partnership with the CEO, they build trust while fostering constructive challenge and accountability, ensuring the Board is aligned, decisions are stronger and the business moves forward with clarity and purpose.”
This is a time where Boards need to continue to ask difficult questions of their leadership teams to help them navigate blind spots. One of the questions raised at the Leadership Retreat was whether, in some ways, too much is being asked of non-executives at present, given the ever-growing list of governance responsibilities placed on them.
Shefaly produced an emphatic response to this notion: “As a Board member, you're serving a broad range of stakeholders who are entrusting you not just with their money, but with the stewardship of the company. And I think it's a place of great responsibility, and we should consciously sign up to it, or not do it at all.”
Jacob Ambrose Willson, Senior Editor, Criticaleye
