Improving board communication is becoming a vital issue as companies work to develop their risk processes post-crash.
How board meetings are approached in terms of the information given to members and how expertise and knowledge is developed, can all impact on the future financial success and safety of that particular company.
Recently I interviewed risk expert Patricia Jackson, Senior Adviser at EY, about the challenges for board members in understanding technical topics such as risk, which some may not feel qualified to comment on. Her advice was firm: hold workshops the night before a board meeting to train members in understanding the complexities.
Patricia was formerly Head of the Financial Industry and Regulation Division of the Bank of England and is also a board director of Atom Bank.
Risk is now a hot topic for boards and the Chief Risk Officer’s influence and responsibilities have broadened.
Patricia feels there is a tendency to overlook how much time non-executives have to devote to a board role and delivering a thousand page report for directors to wade through is to be avoided.
This may be an important piece of advice if boards are to operate effectively.
Julia Mundy is a principal lecturer at The Centre for Governance, Risk and Accountability at the University of Greenwich and has carried out research into board effectiveness. She says it is difficult to elicit the characteristics of an effective board.
A well designed questionnaire among board members on how effective the board is being, she says, will reveal a lot in terms of subjective views but it may not produce hard evidence.
While diagnostic tools, such as the Belbin test – used to identify effective team members during selection procedures – are of some use, she also warns that this exam cannot discriminate between an ‘innovator’ who producers useful ideas and a “dreamer”.
Mundy steers anyone tasked with board selection towards the personality tests of qualified occupational psychologists but cautions that there might still have to be agreement on which characteristics in people are the best for an effective board.
Interviewing Flybe Chairman, Simon Laffin, it became clear that the most important element of running an effective board, is to develop a culture where an ‘appetite for risk’ is well understood. Only then can a proper process be discussed and in the long term, a crisis avoided.
Meanwhile as a coach, it seems to me that all prospective board members would benefit from effective discussion skills training – helping directors to ask the pertinent question without fear of disapproval.
Most people, even at the top of their professions, struggle with speaking in public. Coaching in strong presentation skills can create impactful delivery when asked to show leadership of thought.
Get in touch with me to find out about our group and individual communications coaching: firstname.lastname@example.org and visit my leadership coaching web site: www.leadershippresentationprbusiness.com.
Watch our video interviews of Patricia Jackson and Simon Laffin on our thought leadership site, www.behaviouralfinanceforum.com
Julia Mundy’s research can be found on ResearchGate – www.researchgate.net.