Board of Advisors
Have you ever struggled to gain clarity over the responsibilities of your board of advisors/directors in the strategic planning process? It’s very common, regardless of company size. At SM Advisors, we have experienced this firsthand with our board of advisors. From my experience, a board is invaluable, so having one for your company is not the question. The challenge is how to maximize the effectiveness of the board and its value to your organization. It begins with role clarity.
First, we should define the difference in the board’s role whether it’s a for-profit or a non-profit organization. Because a non-profit often does not have a management team, the board members will be more involved in the strategic planning process. However, for non-profits that have a management team, many of the same recommendations will apply to that for a for-profit company. These recommendations include:
•The board is responsible for company governance and strategic clarity.
•It is the role of the management and organizational team to develop and execute the company strategic and department plans.
•SM Advisors will conduct pre-planning interviews with the board, but board members do not take part in the strategic planning sessions. This is an excellent way to get their input on the future/vision of the company but not to engage them in how to get there.
•At the end of the strategic planning process, the management team presents their recommended strategic plan to the board. At that time, the board can hash out the plan with the team or come back at a later date with feedback.
•The board’s primary responsibility is to challenge the team and their plan until they unanimously agree that it will optimize organizational performance.
•The board can bring significant value to the team by engaging in healthy conflict on specific challenges facing the company. This deep dive provides the management team with exposure to the board but, most importantly, provides them insight and wisdom on how to resolve the challenge.
•Once the team has addressed all of the board’s feedback, the board approves the strategic plan and budget for the coming year.
•Another primary responsibility of the board is to hold the leadership team accountable for the execution of the plan. This is accomplished through monthly or quarterly plan execution review meetings that review financial performance and strategic measurements.
•If the team does not achieve the company objectives, the board has the option to make the necessary changes to the team.
•This approach creates considerable benefits for the business, including:
-The plan is developed and executed by the people who know the company the best – the team.
-The board’s limited time is focused on areas where they can bring the greatest value to the company.
-You can attract and retain top talent who want to take advantage of the opportunity to play an impactful role in the success of your organization.
-Role clarity that minimizes frustration and leads to the most efficient and effective planning process.
Implementing this approach in several companies has led to a revitalization of the team, organization, board and the planning process. Most importantly, it creates a healthy and functional relationship between the board and company leadership. Remember, Those Who Plan – PROFIT!
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