It is critical for board members to be engaged with management to a level that they clearly understand the market and strategy of the company, and they are intimately aware of, and familiar with, the financial, legal, and risk elements of the business.
This generally requires much more involvement than simply a few hours every quarter. It extends beyond board meetings and requires board members to do their homework. In a healthy board environment, the CEO and even the functional leaders of the company should feel comfortable and want to reach out to board members in between board meetings.
Board members need to be comfortable interacting with the CFO to fully understand the financial results, and to dig deeper into the forecasted future results and risks. The CEO should welcome the advice and counsel of engaged board members. A CEO will do well to speak with each board member at least monthly, even if it is just to check in and share a few thoughts. It doesn’t have to be all sunshine and positive results. In fact, these periodic check-ins should communicate brewing issues or concerns so that the board is aware of them long before they reach crisis level.
