Efficiency Makes the Difference Among Boards
The Expansion article, “Efficiency Makes the Difference Among Boards," quoted Russell Reynolds Associates Consultant Ramón Gómez de Olea. It also featured the firm's paper, "Going for Gold — The 2019 Global Board Culture and Director Behaviors Survey." An excerpt of the article, translated from the original Spanish, is below.
Not all boards invest their time in the same way. Some boards prioritize addressing issues that make them highly effective.
Board performance depends on its ability to focus on the right issues, on a number of critical director behaviors, and on the quality of the board leadership. The executive search firm Russell Reynolds asked 750 directors of large public companies worldwide, including Spain, about the culture and effectiveness of the board and the behavior of its members. The conclusions are reflected in the
Going for Gold - The Global Board Culture and Director Behaviors Survey. The data on the report indicates that there is a group of boards that differentiate themselves from the rest by being highly effective in their operation, which the survey qualifies as Gold Medal Boards due to their better performance.
It is estimated that a director spends 200 hours a year on board activities (excluding travel), but not all directors spend those hours the same way. Highly effective directors spend the same hours on board activities, but they prioritize undertaking work related to more strategic issues and looking at the longer term. Thus, they spend more time on forward-looking, value-creating activities.
Strategic planning, oversight of M&A transactions, and CEO and management succession planning are the top three areas where they spent the most amount of their time in the prior 12 months. Directors also spend time on enterprise risk review, board refreshment activities and crisis management planning and, to a lesser extent, on financial statement reviews, audit-related activities, and compliance-related activities.
Ramón Gómez de Olea, Country Manager at Russell Reynolds in Spain, points out that a better managed board should tend to "have a role in the oversight of the company's strategy and to be engaged in the chair and managing director succession processes, but also in the renewal of the board of directors itself".