David's

Core Perspectives

Learn how to create the environment for a Board that can make value-added contributions to the future of the company.

The Core Jobs of the Board: 3 Lines of Sight

An effective board is one that can successfully incorporate 3 different lines of sight: Hindsight, Oversight, and Foresight.

 

According to David’s research, boards currently invest only 25% of their time on their future direction—Foresight. But, when asked how much time they should be investing in the future, their answer was: “50% or more.”

 

A simple tool for every board is to record the amount of time invested in each of these 3 lines of sight and to make an explicit decision on the proper allocation for the next Board meeting. Being “busy,” as most Boards are, is not the same as being “effective.”

Spanning the
Information Chasm

There is a vast chasm between the Board of Directors and the management team, and this challenge has 3 root causes:

Root cause

Time

The typical director invests:

~250 hours/year

The management team invests:

3000+ hours/year

Root cause

Expertise

​​80% of board directors are “gifted amateurs: experienced executives without a background in the industry/company.

The C-suite executives possess extensive knowledge in their specific industry.

Root cause

Attention

Directors (~64 years of age) have a large portfolio of other activities.

The C-suite is singularly focused on the company.

Given these 3 root causes—and without a shared language that can bring these “gifted amateurs” into the picture—there is a high degree of certainty that the information chasm will never be closed, and the Directors will add no value to the ongoing corporation.

The Board Chair

The Board Chair plays the critical role in establishing an effective, value-adding Board. No director can be effective without a truly outstanding Chair.

 

The Chair’s duties can be broken down into 3 “T’s” that make up the essential components of board orchestration:

Component

Talent

Ensure the board has the right skills to be effective.

Component

Tone

Find the balance between trust and tension.

Component

Time

Manage the scarcest board resource: time.

The effective Board Chair is one who can orchestrate these “T’s” to ensure continuous value-added contributions for the future of a company.