December 16, 2021
Gary Bisbee, Jr. 0:49
A board of directors provides leadership and oversight to a business, whether for profit or not for profit. Each board is unique in its makeup, culture and character. That said there’s general agreement that the three most important responsibilities of a board of directors are to establish the vision, mission and purpose of the organization, hire, monitor and evaluate the CEO, and provide financial oversight. Board members contribute foresight, oversight and insight. This is what the board does, but what makes a board and its members most effective? To learn more, we compiled insights from three leaders who are also experienced board members. We’ll hear first from Dr. John Glaser, who is an executive in residence at Harvard Medical School, and currently serves on multiple boards, including HL7, the Scottsdale Institute, Wellsheet, and NCQA. Next, we’ll listen to Kevin Sharer, who is a former senior lecturer at Harvard Business School and is the former chairman and CEO of Amgen. He currently serves on the boards for Allied Minds and the US Naval Academy Foundation. Kevin previously sat on the boards of directors for Chevron, 3M, and Northrop Grumman. To wrap up, we’ll turn to Mindy Mount, who’s a board member of the Learning Care Group, Cerner Corporation, Zayo Group, Group Nine Acquisition Corp, and Technicolor, where she’s also vice chairman. To begin, let’s listen to Dr. Glaser. We asked him what he thought were the characteristics of an exceptionally good board member.
John Glaser 2:25
There’s the usual of any senior leadership person, that they’re bright, they’re honest, they’re direct, they communicate, all the things you’d want to see, you know, just regardless of whether a board member, or a C-suite person, or the management level, you’d want to see that and things like that. I think they bring something to the table that is clear to them, and clear to the others. And that can be because they know a whole lot about a particular topic that’s really important to us, or they’re about as well connected as anybody could possibly be in the industry, or they bring a brand and a legitimacy, frankly, because they’re on the board, this board must be-, whatever it is, it’s clear why there’s an asset that you bring to the table across the board. You know, other things if you keep going down the list is they take the time to understand the company and what it does, and its customers. You say I’m really gonna learn a lot and I got to do more than surface learning, I gotta learn. It doesn’t mean I’m making widgets with the rest of them, but I’m in there learning. And the other is you’re prepared when you walk in and deal with issues, and you’re responsive, etc. So your job is to coach and support as needed, which means, you know, you got to be prepared, understand the industry, understand the players, etc., and know when and how to respond across the board.
Gary Bisbee, Jr. 3:36
Each board member brings unique strengths to the board. The best board members recognize those strengths, leverage them, and develop positive board chemistry. Next, let’s turn to Kevin Sharer to learn more about the characteristics of effective board members.
Kevin Sharer 3:52
I think, first of all, you have to care about the company, it can’t be a check the box, I show up, collect my fee. You got to care, you have to care, and your bias has to be, I’m here to make sure we’ve got the right CEO, the right culture, and we’re obeying the laws, regulations, etc. So you got to take on the role, that you do have a direct responsibility for the broadest possible outcomes. And you’ve got to find a way to be informed on those things. You can’t say, gee, I didn’t know, the CEO didn’t tell me. But yet you have to do it in a way that’s not intrusive, or, or not generally intrusive. Next, you got to have a relationship with your other board members, because boards act together, you’re not a sole person. People have different points of view. You’ve got to come to a reality with them, etc. You’ve got to have some relationship with the CEO in a way that the CEO hopefully respects you and trust you. But you’ve also got to be willing to make some, if you have to, tough calls. Being a good board member is not easy. And you finally have to realize you’re not the operating committee, you are not trying to manage the company. From our science background, the way I used to call it was the board member was more like the PhD thesis committee. The CEOs, the PhD candidate, the thesis committee, evaluates the research, evaluates the quality, etc. But the committee doesn’t do the research or write the report, but they do opine on it, they approve of it. Hopefully they make it better. Some board members are confused and thinking they’re the operating committee, and they’re trying to lead the company. That doesn’t work.
Gary Bisbee, Jr. 5:43
Boards serve many functions, which demands multiple skills. Overall, Kevin emphasizes the importance and the relationship between individual board members, between the board, and the CEO, and management. To wrap up, let’s listen to Mindy Mount thoughts on the balance between governance and management.
Mindy Mount 6:03
That can be a very hard one. From my experience and boards, what I’ve seen is that, when everything is working really well, it’s quite easy to oversee, right, to look at management. Where that line becomes harder and harder is when something’s going a little sideways, right, when the board starts maybe losing a little confidence, when the board is feeling that they’re not getting the right level of transparency. You know, there’s that saying about, what, noses in and fingers out, which a lot of boards like to quote, and certainly it’s a good reminder that we’re there to advise and monitor, we’re not really there to run the business. But that saying does get challenged when you’re having difficulties. And what if you don’t like the strategy that the CEO has come up with? What if you don’t believe that, you don’t like the results that you’re seeing from the business? How do you deal with that? How do you deal with that as a board? And I think that’s where the challenges and the teamwork at the board level in terms of, you know, how do you go through harder times? How do you set the bar high enough for management and push them to do the things that you want them to do? Or, you know, then you have to make the decision to, you know, ultimately, you’re not going to run the company, you’re going to change the management team. It is a very long journey, you know, can be very challenging at a board level to kind of make those decisions.
Gary Bisbee, Jr. 7:32
Each of these experienced leaders and board members shared their unique view of what makes the most effective board member. However, there are two key takeaways they all touch on. First, it’s important for board members to have a good relationship among themselves and with the CEO. Board chemistry is one of the most important strengths of a board. Teamwork facilitates the board’s role in upholding a company’s vision and reaching consensus on strategy decisions, especially in challenging times. Additionally, it aids in the role of monitoring and evaluating the CEO. Second, top caliber board members understand their role is governance, not management. Board members set the vision, mission and purpose of an organization. However, they advise, rather than execute. The separation allows board members to act as outside observers and grants management flexibility in decision making and implementation. Each of these three guests indicated that becoming and remaining a top board member is a work in progress, and they’re conscientious about learning and improving their skills. For more insights, join us on the Gary Bisbee Show every Thursday for more peer to peer conversations about the leadership decisions of healthcare leaders.