Directors set the direction of the organization as a whole through monitoring and driving performance, and ensuring regulatory compliance. Entrusted with a responsibility as big as this, boards of directors, including the CEO and chief executives, should work together as a team. In an ideal boardroom relationship, the CEO and board members cooperate effectively to promote the best interest of the company and secure the future of the company.
The kind of relationship and culture built within the boardroom should be a top priority as it establishes the level of mutual understanding among its members. More than being a group of critical decision makers, boards should be social systems built in trust, accountability, transparency and good communication.
In a boardroom level, trust is necessary in three intersection points: from CEO to board members, board members to board members, and CEO to chief executives. Without trust, the head of the boardroom can’t lead, members can’t make unified and effective decisions, and everyone else in the organization loses direction. Establishing a common perspective such as the company’s vision and mission may be a big help in reinforcing trust, especially for diverse boards with members coming from different backgrounds. Another way is holding informal conversations outside the boardroom to build rapport. Once trust is embedded in an organization’s culture, it becomes instrumental in achieving resilience from the top down.
To balance collaboration and control within the boardroom, accountability should be enforced, starting with identifying roles and responsibilities for each external (the board) and internal actor (management). Furthermore, board members should engage in clear and recurring routines such as systematic and timely documentation and reporting. The transition of reports from different levels of command and into the boardroom promotes accountability. Everyone can hold each other to account and challenge others to demand for transparency. At the same time, board members are made aware of each and every one’s purpose in the company.
Working hand in hand with accountability, transparency ascertains that everyone is doing their job. The board, together with the rest of the organization, lowers the risk of missing red flags and potential crises when there’s transparency in all the roles. It keeps the board engaged and well-informed, and also ensures the right information is disseminated to respective stakeholders at the right time. This allows board members and organization leaders to make better and well-informed decisions for the company.
As a crucial component in all boardroom activities, communication should be a priority. Fortunately, as different communication channels are becoming accessible through technology nowadays, information dissemination and gathering are also becoming a lot easier. For an instance, remote meetings enable board members to communicate and share ideas through a variety of platforms such video conferencing, live chat, and board meeting portal. These collaboration tools promote not just effective communication, but also increased efficiency and productivity within the boardroom.
Strong boardroom relationships are the force behind organizations’ resilience and c and helps sustain the type of corporate governance that great companies have.
Trust in the boardroom is essential because it builds strong professional relationships that can withstand various challenges. It can also encourage individuals to work as a team even when they don’t see eye to eye. CEOs who have strong relationships with their board members deal with conflict resolution a lot better and reach a compromise faster.