Surveys suggest five areas to talk about as 2018 rolls in.
Board governance itself is a hot topic and board best practice surveys are a great way to identify key focus areas and what your board might be able to do in each area in the new year.
Some examples of these studies include:
Public Company Governance Survey (National Association of Corporate Directors, 2016)
Leading with Intent: National Index of Nonprofit Practices (BoardSource, 2017)
Entrenched or Energetic? Improving Credit Union Board Renewal (Filene & Rotman School of Management, 2015)
2017 BDO Cyber Governance Survey (BDO International, 2017)
2017 Board Composition and Director Recruiting (Equilar, 2017)
Here is a quick view of the main themes coming from these surveys. These themes are well-aligned they are with the current conversations at CUES events and in CUES publications regarding governance practices.
Board makeup continues to loom large as a discussion item of concern among sitting board members. While a desire for board diversity can drive the need for term limits and reducing the average age of the board, much more of the board conversation needs to be around the “competencies” of the next board members rather than the “profession” from which they come.
Strategic focus has surfaced as an area of concern among polled board members everywhere. Putting as much time into strategy development (not just once a year) and regularly tracking strategic progress much as boards track financial performance remains a key concern. Board members appear acutely aware that the business environment is shifting quickly around them and a greater investment by the board is required to keep up and to ensure proper strategic planning.
Cybersecurity was among the top five board concerns for the last five years and has leaped to front and center with the recent Equifax incident. Boards are learning how to pay attention to this “risk factor.” Surveys indicate boards are investing more time in understanding the cyber dynamic, how to track security and how to maintain cyber integrity. At least two cybersecurity reports a year to the board has become recent practice for many boards.
Enterprise risk management oversight is surfacing in board surveys as boards investigate what it means for them and how to institute a more rigorous system for identifying risks, defining risk appetite and tracking risk mitigation.
Corporate performance remains a critical worry of most boards due in part to the uncertainty with the domestic and international economy. In highly disrupted domains, e.g. banking and healthcare, boards appear to be doubling down on performance tracking, expanding dashboards and working in greater partnership with CEOs on real-time performance monitoring. Lag times of months has become lag time of weeks in tracking and responding to performance variations.
On a variety of other subjects, board surveys continue to raise concerns around missing board self-assessments, board age as a diversity issue, development of board officers, refreshing meeting agendas to assure proper investment in strategic discussion, proper board size (smaller appears to be the trend) and developing better partnerships with CEOs.
Certainly as pay for board service moves into the credit union domain, governance issues become more prominent and external scrutiny more intense. It might be worth it to keep up with what the surveys and literature is saying about governance as part of your 2018 board development program.
Try Googling the surveys above and see for yourself. Some may be worthy of discussion by your board as a “self-assessment” exercise. Of course, doing a full-blown board assessment and assessing the skills of individual directors are also worthy undertakings.
Les Wallace, Ph.D., is president of Signature Resources Inc. and author of Principles of 21st Century Governance and co-author of A Legacy of 21st Century Leadership. He is a frequent speaker and consultant on leadership and governance.