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The seven characteristics of highly effective boards

A board plays a vital role in the reputation of an organisation, its culture, growth, failures and success, but members need to understand how good governance principles and practices manifest at a board level. 

So, what is the role of a board? What behaviours, attitudes and responsibilities should board members model if they are to be considered a dynamic, strategic group? Read on, as Governance Matters CEO Kate Costello looks at the seven characteristics of successful boards.

1. Create the vision:
A strategic direction of an organisation is vital as there needs to be a clear understanding of what it will look like in five years from now. For example, will it operate in state-based, national or global markets and what products or services will it be offering are questions to think about. Once a vision is established, it’s up to the board to make sure the strategies are planned out to achieve that vision.

2. Learn from the best:
A common mistake many organisations make is they stay within the comfort zone of a specific sector. Learning from other leading industries can help produce outstanding results. An IT company, for example, can learn effective management skills from companies within the hospitality industry.

3. Lead by example:  

The culture of an organisation starts at the very top and it is important for every member of a board to recognise that the way they communicate and act plays a significant role in the operational running of a business. Boards need to walk the talk, and demonstrate their absolute commitment to the direction of the business.

4. Power to the people:
Long gone are the days where control equaled power. It’s now more important than ever to empower staff and management teams. Let them play an active role in the way the business operates and influence what successes are achieved along the way. For example, employees of the Ritz-Carlton are given ‘ownership’ of their roles and that has led to a marked increase in job satisfaction and performance as a result.

5. The measure of success:  
It’s crucial to understand what a good organisational result looks like, and positive financial performance can only be part of the overall success story. A board needs to remember customer satisfaction equals future growth and similarly, staff satisfaction must also be a key indicator and must not be left as purely a management responsibility.

6. Challenge the status quo:  
Think outside the box! The best organisations are those that are constantly evolving, changing and improving the way things are done in today’s changing environment. A board is perfectly positioned to encourage an approach that strives to self-improve from the highest echelons of a business to those working in the front line or supporting roles.

7. Listen to clients and customers:
As the saying goes – the customer is always right. Anyone who has ever operated in a retail environment understands that you are only as good as the last sale. It is critical for a board to keep a finger on the pulse when it comes to client and customer satisfaction. Having a range of measures to capture and track performance indicators on trends, issues, compliments and complaints are as part of the broader organisational performance review.

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Derya Goren

Derya Goren

Derya Goren, a recent journalism graduate and currently a Masters in Islamic Studies student at Charles Sturt University.

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