Chairmen and Remote Governance – An interview with Monica Lagercrantz

How do you, as chairman, confirm that you’re doing a good job?

“Indeed, how do you confirm you’re doing a good job? 

The most efficient way is, of course, to ask for feedback. However, as a chairman, this can be a daunting task. It requires courage to want to gain an objective opinion on your performance. If you’re not brave enough to ask, you won’t receive it. Hence, I would say asking is the first and most important step. 

The next step is establishing a sustainable and efficient process for collecting said feedback on a regular basis. Consistency is key for ensuring honesty and transparency in your process – which is something I highly recommend.”

As a chairman of the board, is it difficult to receive honest feedback from board members, and why?

“A chairman would say no, because they don’t know if the feedback they receive is actually honest. Collecting feedback can be easy, but the hard part is knowing if it’s dependable.

The fact of the matter is that it’s quite complicated. Establishing a reliable feedback loop on this professional level can be somewhat of a challenge. Most board members have been appointed by yourself and, as the chairman, you continue to be the decision maker when it comes to their continuous employment. You decide their fate. This, in turn, makes it challenging for you to get honest feedback because board members risk so much by giving honest feedback. Putting your neck out in an environment such as this one is easier said than done.

I cannot stress the importance of creating enough trust and transparency in your board to avoid getting caught up in this downward spiral. If you truly trust each other, honest feedback will become the norm. And you need honesty to improve as a professional and as chairman. It’s difficult, but it’s crucial.”

For chairmen, what are some of the biggest challenges in a situation where you’re being forced to apply remote work?

“The main setback for a chairman is the fact that you’re not used to remote leadership. In fact, for many, there isn’t even a strategy in place for how to adapt. The challenge here is establishing routines and processes that work for your particular board and your particular situation. This setback, in turn, breeds other hurdles that are worth mentioning:

Firstly, because of the lack of face-to-face contact, getting a clear notion of how board members and other colleagues are coping in this new environment may be difficult. Yet, it’s never been more important to be aware of their well-being. Not being able to interact with your CEO (and vice versa) as you normally would can be especially stressful – for the both of you. And irrational decision making lures in situations where people face a high level of stress and pressure, that much has been proven.

Secondly, making sure that the quality of “regular” board work isn’t affected is important. The key to upholding the calibre of your work is understanding the lay of the land in your board and company in this situation. Also, prioritising correctly on the board agenda is critical to ensure continuous value creation.”

What would you say are things chairmen spend their time on the most, that could’ve been allocated to more important matters?

“It’s a fact that if just one individual in the board is not well prepared, it’s not a good starting point for efficient board work. As chairman, spending your time on getting board members up to speed directly affects the efficiency of the board. It’s up to each and every director to be fully prepared in order for the board to perform as a whole. 

Another thing that can impact a chairman’s time is the material provided by the management team. If the material is not of high quality, the chairman needs to compensate. This can also severely slow down the board’s output. 

When the role of the board hasn’t been explained thoroughly enough to its members, you can expect a major loss of time. Not the general function of boards per se, but a specific board’s function in a specific organisation and in a specific situation. Everyone needs to be aware of the ambition, goals and motivation behind their board in order to move in the right direction.”

What are the main pain points in a board that can be solved by digitalisation?

“The biggest pain point for a board in general is the scarcity of time, both for creating value and aligning around priorities on the board agenda. It’s a well-known global problem that boards struggle to make time for value creation as a result of non-alignment.

Creating a process for continuous feedback falls under the same umbrella. Manually and irregularly collecting haphazard feedback is usually the consequence of lacking a sustainable option. For feedback to have any value to the receiver, you need to able to efficiently track their performance data over time. And to achieve that, you need consistency and a tool that can analyse that data with accuracy.

These pain points can all be countered by forms of digitalisation. Analytics platforms provide critical insights regarding priorities and alignment. Board portals help you keep track of documentation and schedules. Feedback systems are usually data-driven and will help you create loops that, with minimal input, lay the groundwork for a sustainable process. 

The benefits of using digital solutions stand even greater for boards located in countries that require annual state mandatory evaluations. Instead of bringing in external consultants and biased advisors you can conduct compliant evaluations with an all-digital tool – effectively reducing an unavoidable and yearly cost.”

What would you say are things chairmen spend their time on the most, that could’ve been allocated to more important matters?

“The biggest challenge right now lies in the fact that we’re in the middle of a completely unprecedented situation. Apart from the ongoing “regular” board work, chairmen now find themselves having to conduct crisis management as well. Maintaining the quality of normal board work whilst dealing with the crisis is definitely the biggest challenge as of now.

In addition, not being able to meet your colleagues face-to-face makes the situation harder to handle. How are they? Are they well? How concerned, stressed and resilient are they ? The lack of firsthand knowledge exacerbates the difficulty of understanding how their individual situations affect the collective board work.

Prioritising the board agenda is another challenge that chairmen are facing. With new fires needing to be put out everyday – how indeed do you optimise the time? The answer is preparedness. The crisis has made time even more scarce than it was before, which in turn makes gearing up for meetings crucial for any form of efficient output. Simply put, every member of the board needs to dedicate more time before meetings to make more time during meetings.

The challenge here is; how do you, as chairman, ensure that your board members come prepared? How do you lead when you’re miles away?

To simplify crisis management for chairmen, I’d suggest trying to stay focused on the big picture. Dwelling on too many details will make you lose sight of how to contain and manage the situation as a whole. Understanding how to best work with a broad perspective can be the difference between crisis management and crisis misconduct.”

Written by Jacob Lagercrantz

Creative Director at BoardClic.

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