by Steve Adubato, PhD
Management teams of public companies continue to be challenged by the question of how best to communicate with their independent boards of directors. In the post-Enron era and new federal laws encouraging boards to be more actively involved, these communication challenges are greater than ever.
While most leaders of corporations think about individual presentations they make to board members, effectively communicating with this important audience should be an ongoing job. With this in mind, consider the following:
- It is essential that the CEO maintain consistent communication with individual board members, but particularly the board’s chairperson and other key board leaders. Maintain a list of board members’ names, telephone numbers and e-mail addresses prominently placed for the CEO to be reminded of this task.
- When communicating with board members, be very specific on why you are doing it. Don’t reach out just to “shoot the breeze.” Offer concrete and relevant information or ask key questions soliciting feedback. Board members are usually very busy people, therefore, their communication with corporate managers should be seen as a valuable investment of time.
- Be clear of what type of information individual board members are interested in. One board member may have a history of wanting to know about executive compensation when another asks about succession planning. The key is to see each board member as a valued customer or stakeholder and communicate accordingly based on his or her respective area of interest.
- Board members have a particular preference for certain modes of communication. Some like e-mail, others a quick phone call, while a few may need more face-to-face contact. Therefore, you should customize your communication.
- When presenting to the board at a meeting, ensure that your presentation is concise. Board members are inundated at meetings with reams of information. The last thing they need is to have more dumped on them. The average presentation from key managers should be no more than five minutes. The CEO can be longer, but not nearly as long as most assume. Twenty-minutes should be the max, with sufficient time for questions and comments from board members.
- Financial managers often think their communication with the board is “all about the numbers.” Think again. Most board members want to understand what is BEHIND those numbers. CFO’s and other financial managers must communicate by putting numbers in context and simplifying their message so that non-financial experts can better understand.
- It is essential to create a climate at board meetings that is interactive and engaging. Many corporate managers simply want to “survive” their dealings with the board. Rather, the CEO and other managers should learn the art of facilitating a conversation with board members around critically important issues and challenges. This involves asking probing questions, utilizing effective listening techniques and then following up by paraphrasing or asking another question. If this facilitating expertise doesn’t exist on the management team, consider bringing in a trusted outsider to moderate such a discussion.
- Mix-up your communication. At board meetings, there is nothing worse than having one manager after another deliver a PowerPoint presentation. Even if the presentation is effective, over time you will lose the interest of your audience. If the first item is a PowerPoint presentation, make sure the next utilizes a different approach.
- Don’t hesitate communicating “bad news” to board members. It is better that they hear it from you than through the corporate grapevine, or worse, in the media. Candid communication is usually best.