From cybersecurity and climate risk to AI and rising investor expectations, the issues landing on the boardroom agenda continue to grow in scope and urgency. To respond effectively, boards need the right mix of skills, expertise and governance practices.
That’s exactly what we explored in this installment of our Board Excellence Series, which brought together Caroline Davis Schoenaker, Experience Director at Deloitte’s Center for Board Effectiveness, Anthony Goodman, Senior Client Partner and Head of the Board Effectiveness Practice at Korn Ferry, and Sandra Volpe, Independent Board Director at Republic Services.
Together, we identified four key factors that can help strengthen board effectiveness.
1. Build your board around your strategy
When thinking about board composition, boards need to balance a range of considerations, including industry expertise, leadership experience and diversity. If you don’t know where to start, your company’s business strategy should provide the foundation for decisions on board members.
“The board needs to understand what the strategy is and understand what the implications are for the composition of the board,” explains Anthony.
In practice, that means taking an honest look at the board’s existing skills. Many boards use capability matrices to map directors’ experience against strategic priorities, but these exercises only work if directors know where their core strengths lie and where there might be gaps.
Once those gaps are clear, boards can focus on bringing in the capabilities needed to support the company’s strategic direction. If a business is expanding into a new market, pursuing new AI capabilities or entering a new regulatory environment, the board should consider whether it has the right expertise in place to oversee those changes.
2. Avoid the “one-trick pony” trap
At the same time, boards need to avoid swinging too far in the other direction. Although expertise matters, filling the room with specialists whose knowledge is too specific can create its own challenges.
“A board made up of one-trick ponies is nothing but a circus,” says Anthony. “You need to be careful about having a board where everybody’s only an expert in one very narrow area.”
In practice, many boards benefit more from experienced business leaders who bring broad strategic thinking alongside enough familiarity with key areas such as technology or cybersecurity to ask the right questions.
For example, rather than appointing a dedicated cybersecurity specialist, boards could bring in external advisors to assess risks, identify gaps and develop response plans, while helping directors understand the strategic implications for the business.
3. Be radically transparent with your investors
Board effectiveness is also shaped by how directors engage with investors, particularly during periods of scrutiny or activism.
“It’s about being transparent and fact-based,” reflects Sandra. “That’s given us a good relationship with our investors, because nothing comes as a surprise.”
That level of openness requires preparation. Board members who engage with investors need a strong understanding of both the company’s strategy and the priorities of its shareholders, often working closely with investor relations teams ahead of discussions.
“As a board member, I need to educate myself,” Sandra explains. “I need to make sure I understand how our strategies relate to what the board and what the investors are concerned about.”
When that preparation is in place, investor conversations become far more constructive. Keeping stakeholders informed about strategy and performance helps prevent surprises and allows disagreements to remain productive rather than adversarial.
4. Include succession planning in CEO evaluation
Evaluating the CEO is one of the board’s most important responsibilities, but it’s also one many boards find difficult to undertake effectively.
“It’s one thing to set the goals, have them agreed and understand what the metrics are,” says Anthony. “It’s another thing to have the conversation about performance, how it’s going to be done and who’s going to do it.”
CEO evaluation should also be closely tied to succession planning. Even if a leadership transition is years away, developing internal talent is a critical responsibility of both the CEO and the board.
“The board is the steward of long-term strategy and long-term stakeholder value,” Caroline explains. “If the person at the helm is not aligned with that stewardship, then it may be time for a change.”
Watch the Board Excellence Series
These insights are part of our Ideals Board Excellence Series, where governance leaders share practical lessons on strengthening board effectiveness.
Register for the full series for more perspectives on how boards can build the skills, transparency and leadership they need for long-term success.