(Re)Designing The Boardroom For Perpetual Uncertainty

From left: Barton Edgerton, Associate Director, EY Center for Board Matters; Kellye Walker, Chief Legal Officer and Corporate Secretary, Eastman Chemical; Board Member, Lincoln Electric Company and T. Rowe Price Funds; Nigel Travis, Former CEO and Executive Chairman, Dunkin and Board Member, Abercrombie & Fitch and Advance Auto Parts; Kris Pederson, Leader, EY Center for Board Matters
Two seasoned directors offer advice for directors struggling to find adequate time to thoroughly assess strategy, potential disrupters and overall risk scenarios.

How can you help your company with risk management when it’s almost impossible to know what’s around the corner? It isn’t easy—especially when the meeting agenda seems to grow longer by the day. At the recent Boardroom Summit, experts from EY’s Center for Board Matters were joined by Nigel Travis, former CEO and executive chairman of Dunkin’ and a board member at Abercrombie & Fitch and Advance Auto Parts, and Kellye Walker, chief legal officer and corporate secretary for Eastman Chemical and a board member at Lincoln Electric Company and T. Rowe Price Funds, to discuss how to make the most of meeting time.

Shorter board books. “I truly think board members have too much to read,” said Travis. “As a result, too many directors are relying on management presentations that eat into discussion time. The most critical thing is agreeing on longterm strategy, so you need to spend time on that. Board members get very frustrated because someone puts up a bunch of slides and they don’t really have chance to have input.”

One answer is to pare down board books. “[You need to] almost put limits on the number of pages for each presentation,” said Walker. Writing more succinctly takes time, she added, so agenda preparation needs to start a lot earlier. “It also goes back to how engaged the board is and their understanding, so you’re not having to explain basic things over and over and over.”

Offering an executive summary of key takeaways would help make time, “as opposed to going through the 15 or 30 slides that are in the materials,” she added, noting that at Lincoln Electric, where she serves on the compensation committee, slides involving issues that require approval are flagged. “Just to remind us: This is a page where you need to focus.”

Use consent agendas—with caution. Grouping routine meeting discussion points into a single agenda item so they can be voted on quickly “will save time, for sure,” said Walker. “My caution on that is making sure that things that should have some discussion don’t creep into a consent agenda. Because if something goes bump in the night and you have lawyers asking questions, and then they see something that should have had some discussion and it’s a part of a consent agenda, that’s problematic for the board.”

In some cases, what might be routine for one board member goes over the head of another, said Travis. “There is a danger with the consent agenda that it gets rolled in and other board members go away and think, ‘Yeah, okay, well I think that made sense,’ but they couldn’t explain it. The job of the chair is… to make sure everyone understands what they’re signing up for—because we all have the responsibility.”

More discussion between meetings. As independent chairman at Abercrombie & Fitch, Travis calls every director before board meetings to get a sense of their current concerns and issues so he can bring some of those into the discussion. “That makes the board a more dynamic place, and you get the outside-in perspective in a way that I don’t think has existed previously,” he said.

Walker added that board chairs should also be engaging with management ahead of time to ensure they are ready for discussions, “because if that’s not given as a direction beforehand, people are not going to be comfortable having this open dialogue with the board.”

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