Have you ever thought to calculate and report on the cost of having a board? The cost of a board far exceeds the visible cost. Senior executives spend considerable time preparing information for the board, writing agendas, papers and minutes, tracking down information, the logistics of board travel and meetings, and interacting with governors in committee, board, or one-on-one meetings.
A not uncommon issue in colleges is that governors believe their board and committee papers are too long and yet executives get frustrated when they believe governors are not fully reading their reports. Starting a conversation around calculating the board's cost can be hugely beneficial to all who sit around the board table. Benefits include:
1. A greater understanding and appreciation by the board as to the time senior executives input into supporting them.
2. The above has a tendency to lead the board into better clarifying its ask from senior executives.
3. A clearer ask by the board leads to a better understanding by the executive of what is required of them.
4. The board has the opportunity to review and refocus on what it wants to discuss/decide in meetings and how much and in what form it wants the information necessary for such discussions and decisions to take place.
5. All of the above can lead to better board - management communication, more efficient meetings and more effective decision making.
To start such a conversation, as a board you could ask yourself the following questions:
1. What percentage of their time do we think the Executive spend on supporting the board?
2. Are we aware of this investment of time and what is the cost?
3. Do / should we monitor the return on investment (ROI) of the time executives spend on supporting the board?
4. What would give the most improvement in ROI for the time spent on board support?
- improved reporting systems
- better time management and delegation by the senior executives
- a more strategic focus to board information requests
- better communication between the board and senior executives
The cost of servicing the board is something that the corporate sector have been involved in for a while. Board Intelligence, a supplier of board portals, has a free calculator on their website that allows organisations to calculate the cost of board reporting by the Executive.
Some organisations report to the board annually on the time spent by Executives on board support. If as a board you don't believe that such reporting and any subsequent ROI calculation is necessary, there may still be some benefit in taking the time to discuss with the Executive what their contribution is in time and money and how the system of their support can be made more efficient and effective.