Welcome to Module 2: Board Fundmentals
In this module…
You will learn about:
– Boards and Committees
– pathways to the Boardroom
What is a Board?
One of the most important things to first understand is, what exactly is a Board, and why so they exist in the first place! If you search Google (cos that’s what we often do these days), you’ll find the definition of ‘Board’ to be:
‘A group of people constituted as the decision-making body of an organisation’.
What is Governance?
A Board has an important role of ensuring and upholding ‘Governance’. Governance is the glue which helps organisations run effectively and efficiently. It relates to the legal obligations, structures, systems and policies in place that hold an organisation, business or project, together.
Boards can be referred to by a range of different terms such as Board, Board of Directors, Committee, Committee of Management, Trust, Council, for example. The terms are dependent and reflective of the type of organisation they are and what business model they operate under.
The members of a Board are also known by different terms, depending on the type and nature of the Board and organisation. Board members can be called Members, Board Members, Directors, Non-Executive Directors, Councillors, Trustees, Committee Members, for example.
Types of Boards…
Boards and Committees can be generally categorised into three functional types including:
– Governance Boards; responsible for providing strategic oversight and decision-making only.
– Operational Boards; responsible for both decision-making and the implementation of those decisions.
– Advisory Boards; responsible for providing expert or independent advice only, no decision-making or implementation.
Types of organisations…
Boards have a distinct role and responsibility in overseeing an organisation’s activities however their purpose is driven by their business structure, type of organisation they are and what their business model is. Organisations are either Commercially-driven or Community-driven. Organisations generally fall into one of four business structures, including:
– Private businesses; commercial business of varying sizes aimed at generating profits.
– Public-listed companies; medium to large businesses listed on the stock exchange for anyone to purchase shares.
– Public authorities; government and statutory organisations established to deliver community and public benefits.
– Not-for-profit organisations; entities established to assist the community or drive a specific purpose than derive profits.
Boards come in various shapes and sizes. There is no one-size-fits-all! The number of members and their role depends on the type and nature of the organisation. Boards and Committees have a general form of structure and composition. They usually comprise:
– Chairperson; responsible for co-ordinating the Board.
– Deputy Chairperson; provides support to the Chairperson.
– Members; refers to formally appointed members of the Board.
– Sub-Committees; made up of any of a few Board members to consider specific matters and provide recommendations to the Board.
Consideration is also given to social and professional diversity for different perspectives which Module 1 highlighted.
There are four key factors which dictate what a Board needs:
– The type and nature of the business structure
– The type of Board that is required
– The stage of business the organisation is in
– The geographical reach of the organisation
To best explain the stages of a business, below is a chart of a Business Lifecycle. This highlights the phases a business goes through and where the skill sets for the Board, will change.
Boards and organisations benefit most from having the right people who are aligned in purpose, experience and qualities to add value to decision-making. The right people are considered in light of their unique set of hard and soft skills and attributes. More details on the skills you need is covered in Module 3.
Understanding these factors provides insight into the direction of the organisation and informs what suitable composition, skill mix and attributes are required by a Board, to best serve the organisation and its stakeholders.
Each Board member does not have to attain all of the desired skills but rather, their key expertise or insight contributes to the collective combination of qualities held by the Board, overall as a group. Below is an example of a ‘Skills Matrix’.
Whilst a list of skills can be used for a current situation, consideration needs to be given to the future skills which will be required by boards, both in the short-term and the long-term.
The BoardSpectrum is an infographic developed to capture and represent, in a simple format, the size/scale and type/nature of organisations, and their geographical reach. It help you classify and categorise entities so you can identify where you best align, given your set of skills, background and experience. You can plot your journey and determine other suitable board pathways.
Watch the following video to understand more about boards.
Task 1: Identifying your experience
To help you direct your energies and focus your journey so you don’t waste precious time and effort, the following Board Pathway worksheet is available for you to complete. The aim of this worksheet is for you to help provide you with insight into where you are most aligned.
Think about where your experience, both personal and professional, has primarily been. Consider both the type of organisation and the extent of the area your work has covered.
You will find your Module 2 Board Pathway question sheet in your workbook.
Task 2: Identifying your Board pathways
This task involves using the BoardSpectrum to identify your Board pathways.
1. Draw the BoardSpectrum.
2. Using the information for your Board Pathways worksheet, shade the quadrant and the rings which reflect your experience.
3. From here, shade the remainder of the quadrant and rings which adjoin the initial segment/s you noted.
These additional segments are the potential pathways for your Board journey!
You will find a notes page is in your workbook for this task.
The great aim of education is not knowledge but action!
– Herbert Spencer
The outcomes of this module is to provide and equip you with four important areas to help you understand Boards and how you can streamline getting a Board role.
The four key outcomes of Module 2 are:
1. Board Types: Understanding the types of organisations and Boards allows you to appreciate where you may be most aligned in your skills and experience.
2. Board Composition: Knowing that all Boards and Committees reflect the needs of the type and nature of organisation and there is no one-size-fits-all, can help identify what opportunities are available.
3. Board Skills: What skill sets are needed collectively on a Board and that Board members are not each expected to have all the skills necessary for that Board.
4. Board Pathways: You can identify what type of Boards you may best fit given your experience and skills.
You’ve completed Module 2 to better understand Boards. Well done!
To ensure you’ve learnt the key outcomes of this module, a checklist can be downloaded from the button below so you can track your steps. Use this to record your progress.
The Module 2 Checklist can be found in your workbook.
Take the next step in your Board journey…