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Visionary Boards of Directors

Visionary Boards of Directors

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Visionary boards of directors create governance models that fit the organizational needs of the company they govern. These boards are an ongoing source of new ideas and fresh evaluations of old ones.
Visionary boards of directors create governance models that fit the organizational needs of the company they govern. These boards are an ongoing source of new ideas and fresh evaluations of old ones.

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Published by: Dr. Earl R. Smith II on Oct 09, 2008
Copyright:Attribution Non-commercial

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05/23/2010

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Visionary Boards of Directors
By Dr. Earl R. Smith IIDrSmith@Dr-Smith.comwww.Dr-Smith.comVisionary boards of directors create governancemodels that fit the organizational needs of thecompany they govern. These boards are an ongoingsource of new ideas and fresh evaluations of old ones.One of its principal roles is monitoring the resultsagainst the strategic plan and developing alternativeswhen performance is less than desired. During thisprocess, the board conducts assessments to identifystrengths, weaknesses, opportunities and threats. Itcompares results to industry standards. Whennecessary, it develops resources to help in this evaluation and planningprocess. Committees and advisory boards develop and submit forapproval plans that address the issues raised by the assessments.Directors monitor these efforts, vote on the submitted plans andcharge the CEO with carrying out the operational aspects of the plan.Visionary boards encourage high performance and match thatencouragement by performing at a very high level. The board leadersdetermine board characteristics. The corporate culture also plays a rolein how a board functions. Most visionary boards are complex, dynamicoperations that require strong leadership to maintain directorengagement and professional levels of attention.Some of the characteristics visionary boards are:◊ Future Focus: For visionary boards, results are the most importantmeasure of success. Building on success and mitigating the impact of failure is more important than passing out accolades or finger pointing.Certainly, they reward success but they also view today’s success as astepping-stone to future improved performance - only one-step in the journey to the ‘next level’ of operational excellence.◊ Entrepreneurial Spirit: Board members expect the CEO and seniormanagement team to engage employees and their teams bychallenging them to exceed industry standards of operations. Visionarydirectors know failures are inevitable and accept that rewards need tobe proportional to risk. They also know that there is a differencebetween those ‘risky’ initiatives and the ordinary course of businessactivities. A visionary board understands that the entrepreneurial spiritis important to the future of the company and cultivates it both withinthe board and the management team of the company.
 
Customer Focus: Visionary board leaders are customer focused.Directors look for new and novel ways to engage customers. Theyunderstand that the customer’s assessment and perception of thecompany plays the most important role in determining the value of thecompany’s brand.Market Driven: Visionary directors support strategies that exploitproven markets and enter new ones ahead of the competition. Boardmembers understand markets may change rapidly and failure to adjustthe product/service mix to match customer needs will result indecreasing shareholder value.Open Door Policy: Visionary boards encourage new ideas. TheChairman practices the art of open-ended questions expecting otherdirectors to contribute and fill in the blanks. Boards look to the CEOand the management team for innovative ideas to cut costs andincrease productivity but board members themselves are often thebest source of the truly visionary ideas that drive a company forwardinto new territories.◊ Partnership Governance: Visionary boards look for partners to helpthem meet major challenges. Visionary boards will collaborate withsuppliers and even competitors to cut costs and share in risk.Corporate ethics dictate guarding trade secrets, but strategies toaddress common issues among competitors that improve the industryas a whole and appeal to a common customer demand are often mosteffectively addressed by collaborating with competitors.◊ De-centralized Decision-Making: The speeds at which markets reactoften demand prompt board actions. Demands on Directors’ timerequire that board meetings focus on strategy and the performance of the CEO and senior team. However, that does not relive the board of the responsibility for extended governance and effective oversight. Avisionary board operates effectively between board meetings. Goodgovernance moves decisions out of the boardroom and into the handsof committees, advisory boards, operators and corporate management- but always under the oversight of the directors. Any good boardgovernance structure requires a network of committees and advisoryboards composed of diverse talents. The board delegates responsibilityand resources to carry out tasks but retains the responsibility andauthority for final review and enactment of recommendations.Leadership Development: Sustainable decentralized governancerequires a strong leadership development program. Governance, whichdelegates authority while reserving accountability, places burdens onthe board, directors and CEO. They all must mentor leaders and clearly

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