“Everyone has a plan, until they get punched in the mouth.” Mike Tyson

 

During board evaluations for clients, we often insert a question asking whether the board has a work plan. Quite often, directors respond yes and, on further interrogation, they claim that the board is very good at sticking to its meeting calendar and agenda. A board work plan is not the board meeting calendar. Neither is it the board agenda. A board work plan is an overarching road map to where the board wants to go during the next calendar year. Board meetings aside, boards should be bringing in external experts to advise on strategy, the economy, sustainability, cyber security and a whole other slew of burning platforms that companies are grappling with. Boards should be meeting key stakeholders like customers and employees. Boards should be deep diving into senior management succession planning and talent reviews as well as product innovation plans. This is over and above the humdrum of the usual discussion of the budget and major activities that happened in the quarter under review.

Going beyond the numbers and into the future outlook of the company needs commitment. It needs planning. That is best reflected in a board work plan that ideally is designed by the board chair working in tandem with the company secretary and the managing director. The board says what it wants to focus on during the year. The dog wags the tail. If the board does not have a work plan, then the agenda will be set by management. Management will manage the board. The tail wags the dog. The same applies to board committees where the committee chairpersons should design the committee work plan in tandem with the company secretary. Some of the best boards I have seen insert the work plan into the quarterly board pack. This enables directors to see what the plan was for the quarter in question, and whether the board pack and board meeting agenda match what had been planned.

Then the first punch in the mouth arrives. A massive fraud. A competitor makes a big price undercutting play and profitability takes a hit. A regulator pulls the rug from the industry’s unsteady feet. Suddenly the board’s attention is diverted to resolving a crisis. The work plan enables the board to stay to its true north when the crisis is averted because, truth be told, with meetings happening on a quarterly basis it is difficult to envisage a crisis remaining front and center for more than three months. Unless the crisis is the death of the CEO and the board had never succession planned that role since, until that moment, it had been treasonous to imagine his death.

Without a work plan, clever management who went to  the university of never-waste-a-crisis can ensure that the board is kept distracted for the rest of the year. The tail wags the dog on and on.

Speaking of treasonous thoughts, another area that is often misunderstood by directors is the question: “Are directors actively involved in the annual goal setting and performance evaluation of the CEO?” Often we do get the response, yes. Upon further interrogation, the directors admit that they discuss the CEO’s performance at every board meeting when the financial performance of the organization is discussed vis a vis the annual budget. You cannot conflate the annual performance of an individual CEO with the annual financial performance of the organization. That is reducing the CEO’s role to primarily being a combination of a salesman and an accountant. The professional crossbreed in charge of sales and cost management.

The CEO’s critical role of being responsible over the wellbeing of employees, engagement of customers and suppliers, managing regulators, keeping the neighborhood community elders happy and massaging shareholder egos is totally lost here. The director who believes that a discussion of the company’s budget every quarter is a sufficient review of the CEO’s performance does not understand the role of the CEO. Further, at great risk of suffering such a director’s ire, he does not understand how all these CEO deliverables are tied to his own director responsibilities over the organization. Directors have a role to play in board work planning as well as being involved in the CEO’s goal setting and performance management where possible.  If you don’t manage management, management will manage you.

 

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Twitter/X: @carolmusyoka